Economy czar Simsek to initiate spending cuts

According to pro-government daily Türkiye Gazetesi, Minister of Treasury and Finance Mehmet Şimşek told AKP central administrative committee members that  austerity measures will be strictly followed to ensure the uncompromising implementation of the economic program and to restrain inflation. Şimşek said, “Not a penny of extra-budgetary funds will be given to public institutions. No SEE, ministries and municipalities will be able to exceed the limits set in their budgets. “No one should come to me for additional funds,” he said.

‘Retirees and the high cost of living’ were cited as the main factors in the AK Party’s election loss. Before the election, the AK Party staff, especially President Recep Tayyip Erdoğan, pushed for all possibilities to take a new step, especially for retirees, but Minister of Treasury and Finance Mehmet Şimşek rejected these demands, stating that the current budget would not allow this.

Şimşek, in the meeting he held with some AK Party staff and ministers after the election, explained why no new steps were taken for retirees: “To do this, Turkey would have to borrow from abroad with an interest rate of more than 50 percent. If we did so, we would also mortgage future generations. “We couldn’t allow this,” he said.



Allowance will only be given to investments whose physical realization is over 60-70 percent. Apart from this, for example, if the physical realization is 20 percent, the appropriations for such investments will be spread over years. If the physical realization of a 4-kilometer tunnel investment is 500 meters, there will be no rush on this issue. However, investments such as agricultural production, qualified investments, irrigation and dams will be prioritized. Rationalization studies were carried out in the public investment program, and investments that would be completed in a short time and produce economic and social benefits were prioritized.




The construction of new public buildings will definitely not be allowed. On the contrary, savings will be made on public building expenses. Future funding requests in this regard will be rejected.



There will be restrictions on purchases of new vehicles. Saving on soaring vehicle leases and purchases is one of the issues we attach most importance to in our efforts to trim expenditures.

There are very strict rules when renting or purchasing a new vehicle. When requests to purchase a new vehicle come in, a meticulous review is carried out. First of all, we say ‘sell the current vehicles you have, then buy a new one’. Even if they are going to buy a new one, we tell them to buy TOGG, Turkey’s domestically produced  brand.


The Public Procurement Law will be  amended. Public procurement legislation will be updated to comply with international norms and standards. Expenditures on public procurement will be savings-oriented. Every step will be taken to prevent excess bidding that may arise in public procurement.



Minister of Treasury and Finance Mehmet Şimşek stated that the artificial intelligence-supported study they initiated to detect rate discrepancies in VAT has been completed. Many businesses were using receipts for 1 percent VAT applied to basic food, although the actual amount they collect is between 8-10 percent. These businesses are paying the 10 percent tax from the citizens to the state as 1 percent, causing tax evasion.

Sharing a post on his social media account about the work carried out to prevent VAT loss and evasion, Minister Şimşek pointed out that field inspections will be carried out on companies that are found to be exploiting the low VAT rates applied to reduce the tax burden on basic need products.


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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and and has contributed to the financial daily Referans and the liberal daily Radikal.