Turkish Tax News
Diyadin YAKUT
14 November 2016Diyadin YAKUT
2430READS

Delay in secondary legislation holds potential investments worth billions

Industrialists are reported to have postponed their investment projects due to the delay in the enactment of the necessary secondary legislation of East and Southeast Anatolia Investment and Support Initiative, an ambitious investment incentive package tailored specifically for 23 eastern cities economically lagging behind the national average and declared by Prime Minister Binali Yıldırım back in early September 2016.

Calling on the Development Ministry officials, who are tasked and authorized to implement and monitor this investment scheme, to act swiftly in crafting the relevant legislation needed for daily implementation, potential investors are demanding from the authorities to harmonize the recent investment package and previous incentive system developed by the Ministry of Economy to help them benefit more effectively.

Commenting on the latest developments in this regard, Chairman of the Apparel Industrialists Association of Turkey Şeref Fayat labeled the most recent investment incentive package declared by Prime Minister Binali Yıldırım as the most comprehensive incentive scheme of the history of Turkish Republic due to presence of unique incentive elements. Pointing out that there were mostly employment-related incentives in previous packages so far, Chairman Fayat said that the incentive elements especially regarding building and relocation expenses stand attractive to would-be investors. Although everybody initially felt excited for the upcoming investment benefits, he noted that there is now a sense of ambiguousness among industrialists due to absence of a precise secondary legislation regulating day-to-day implementation of individual incentives.

Coexistence of two packages is confusing
Reminding that approximately 200 million Turkish Liras has been allocated to concerned investment incentives as part of current budget period, Fayat alleged that investors are unable to benefit this opportunity due to lack of proper secondary legislation. He also drew the attention to the fact that there exists yet another investment incentive scheme previously put into effect by the Ministry of Economy back in 2012 overlapping the most recent one. He further contended that because 23 provinces designated as beneficiary administrative units within the context of the last investment incentive scheme fall into 4rd, 5th and 6th Investment Zones specified in the previous incentive system put in place by the Ministry of Economy in 2012, potential investors are ambivalent when it comes to deciding to benefit which package. This in turn compels potential investors, according to Fayat, to step back from their imminent investment projects and choose to wait for a while.

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