ITO President Avdagic: SGK Upper Limit And Income Tax Brackets Should Be Reviewed

Istanbul Chamber of Commerce (ITO) President Şekib Avdagiç said: “The upper limit of SSI needs to be reviewed. We have no problem with the net figure determined in the minimum wage. We do not have any criticism in the current living conditions. On the other hand, we give importance to three issues such as the revision of the income tax brackets and the revision of the regulations on severance pay.

ITO President Avdagic made assessments on the economic agenda.

Making a statement on the exchange rate reflections on the markets and its impact on the business world, Avdagiç said: “It is not our top priority to keep the exchange rate low, high or stable. It is an important issue if the exchange rate is parallel or close to inflation. saying.

‘WE HAVE EXPERIENCED HARD CORRECTIONS IN KURDISH’

“Every time the parallel or close course of the exchange rate with inflation in our country deteriorated, the Turkish economy had to undergo drastic corrections. In the last few years of our economy, we’ve seen it.” Avdagic said:

“Although the exchange rate was really manageable in the second half of 2021, the relationship between inflation and the increase in the exchange rate has been broken since the second half of 2022. The exchange rate returned to a flat course and the inflation continued to rise. Although inflation rose rapidly in the second, third and fourth quarters of 2022 and in the first quarter of 2023, the slight increase in the exchange rate created a structure that made exports difficult and imports easier. We say: ‘If the exchange rate is not at the desired level, the exporter is having difficulties’, in fact, we have to look both ways. Türkiye’s foreign trade figures confirm this.

Every time you press dry, you suppress exports, there is a contraction in exports, but at the same time, there is a rapid increase in imports. Because imported products are becoming attractive. In this sense, there is a loss on both sides. At this time, the correction movement has been implemented in the coin. From now on, at least, the currencies must carry out a process compatible with inflation after this period, if inflation increases in the second semester until the end of the year, the exchange rate must also increase, even if there is a 1- 2 points difference, it is important to act logically”.

‘TAXES IMPOSED SHOULD BE REVIEWED’

Recalling that the minimum wage increased by 107 percent in 12 months in July 2023 compared to July 2022, and that the CPI increase announced by the state was 40 percent in the relevant period, Avdagiç said: “In In other words, our minimum wage increased by 67 percent in real terms. It is necessary to evaluate all regulations by conducting macro-impact analysis. We consider the net of the last figure of the minimum wage reasonable. However, at this point, there are three important issues within our expectations.” saying.

Avdagic continued his words as follows:

“We need to quickly adjust the tax brackets. Currently, the rate of increase in tax brackets has lagged far behind both inflation and the increase in the minimum wage.

In 2000, the first tranche of income tax was 22 times the minimum wage. Now in July that has dropped to 6.1 times the minimum wage. When people get minimum wage, it shouldn’t be seen as just minimum wage. It is necessary to see the income of all employees and the cost of the employer.

An employee who receives a gross salary of 60,000 lira on January 1, when we look at the point he has reached in terms of tax brackets, receives a 35 percent increase, equal to the minimum wage, on July 1. But his net salary in the second half of the year becomes equal to that of the first half of the year. The tax brackets kick in so quickly that even though the employee’s salary increases by 35 percent, the employee’s net income remains constant. Therefore, it is important for us to review the tax brackets in a way that they compensate for the losses of the last 10-15 years, not only taking into account the minimum wage, but especially the other tax brackets.”

Stating that another problem is the upper limit of SGK, Avdagic said: “The upper limit of SSI was 5 times the minimum wage, then it increased to 6.5 times and then it went to 7.5 times. The SSI premium has now exceeded 100 thousand lire. An employee who receives a salary of about 100 thousand lira, 14 percent of his own salary, 15.5 percent of the employer’s share within the scope of the employer discount, a total of 32.5 percent with insurance of unemployment”. he made the comment of him.

Avdagic said: “The SSI upper limit should also be reviewed. We have no problem with the net figure determined in the minimum wage. We do not have any criticism in the current living conditions. On the other hand, we give importance to three issues such as the revision of the income tax brackets and the revision of the regulations on severance pay.

VISA RESPONSE TO THE EU

ITO President Avdagiç reminded that the visa-related process has been even more problematic in recent years, and that the Schengen visa-related process has gradually become difficult since 2016, and that both the business world and the The President of the Republic discussed this issue at the TOBB general assembly on May 30 and recalled that he had mentioned it as a priority issue.

“Visas with the EU were supposed to be lifted in accordance with the Customs Union agreement. But that didn’t happen.” Avdagiç said, emphasizing the following:

“The visa incident is used as a political argument in Türkiye. There are some issues that complicate the process. While the visa application period varies from country to country, you are expected to make an appointment in 6-9 weeks. You have to present almost a folder of documents. These documents are also against human rights.

We believe that it is unethical to ask for non-shared matters, such as all financial statement processes, personal property and social security. There are a ton of documents required and when you add in the 2-3 week evaluation process, it takes 9-12 weeks.

The visa, which was issued in the sense of expiration, was shortened compared to the previous ones. Those who have received a 4-5 year visa have started receiving a 3-6 month visa. The visa refund rate has reached 20%. Although some general consuls presented technical reasons such as ‘there is a very high demand for visas’, we see this; We see that the Consulate General of country A in Istanbul is different when a Turkish citizen leaves, and when a person from a Balkan or Eastern European country living in Turkey applies for it with a passport, the process takes a different time. . The same is true for the US and Canadian visa process. If your visa has expired, if you have not applied before your visa expires, you are screened from scratch and an appointment is made 12-18 months later.

Avdagic concluded his words as follows:

“There is an approach that does not make sense here. This situation is also on the agenda of our state. Turkish citizens pay almost 120-130 million euros a year for the visa package. So to speak, we finance the budgets of all the consulates and embassies in Turkey with our visa money. The Istanbul Chamber of Commerce has agreements with 7 different countries to carry out the visa process. We believe that the unilateral withdrawal of opposition countries from 2022 is also systematic.” (AA)