Turkey to raise corporate tax to fund quake rebuilding

Turkey will raise corporate taxes to fund the recovery from major earthquakes that struck the country in February, according to a draft law presented to parliament by President Tayyip Erdogan’s ruling AK Party.

The earthquakes in southern Turkey killed more than 50,000 people and left millions homeless. Business groups, economists and the government have said rebuilding could cost Turkey more than $100 billion.

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The government promised to rebuild more than 600,000 homes for people left homeless by the quakes.

Among a number of proposed tax rises, the draft law raises corporate tax to 25 percent from the current 20 percent, while corporate tax for banks and financial institutions will rise to 30 percent from 25 percent currently.

In order to encourage foreign trade, the bill foresees introducing a five percentage point corporate tax discount for companies’ export income, according to the draft text sent to the parliament.

The bill also would also transfer the treasury-run part of the forex-protected lira deposit accounts scheme to the central bank. Under the scheme, the government and the central bank compensate lira depositors for losses due to depreciation.

The government paid 92.54 billion lira ($3.6 billion) from the budget to depositors with lira savings under the scheme last year.