Structural Reform Proposals for the Turkish Economy: Foreign Trade and Tax Regulations

The Need for Structural Reforms in the Economy To escape the persistent spiral of high inflation, interest rates, and exchange rate volatility, the Turkish economy requires deep-rooted structural reforms beyond traditional methods.
These proposed solutions aim to strengthen economic independence, protect the value of the Turkish Lira, and encourage employment through radical steps designed to prevent economic issues from becoming chronic.
Additional Customs Duties Against the Foreign Trade Deficit Foreign trade data reveals a deep imbalance, particularly in trade with Far Eastern countries.
While imports from China, South Korea, Japan, and India total $80 billion, exports to these nations stand at only $5 billion, resulting in an annual deficit of $75 billion.
Experts suggest that this situation harms domestic industry.
A proposed 40% additional customs duty on Chinese-origin products is projected to generate an annual revenue of $10-12 billion for the Treasury.
This move aims to narrow the trade deficit while protecting domestic producers.
Tax Regulations to Lower Fuel Costs It is proposed that the additional revenue generated from imports be used directly to lighten the tax burden on fuel.
This fund, equivalent to approximately 500 billion lira, could allow for the complete removal of the Special Consumption Tax (SCT) on fuel and a 50% reduction in Value Added Tax (VAT).
This step, intended to be taken without disrupting the budget balance, is expected to contribute directly to the fight against inflation by lowering logistics and transportation costs.
Directing Capital to Production: Taxation on Interest Income To direct economic resources toward investment and production rather than rent-seeking, a proposal has been made to increase the withholding tax rate on interest income to 25%.
It is highlighted that under the current system, industrialists who take risks by investing pay a 25% Corporate Tax, while those earning interest income face a lower tax burden.
This regulation aims to encourage capital to flow into real sector areas that contribute to employment, exports, and growth instead of remaining in interest-bearing accounts.