Şimşek to announce austerity measures on Monday: Here are the expectations

Treasury and Finance Minister Mehmet Şimşek will announce a ‘comprehensive package’ in the coming days. With the package, public expenditures will be ‘frozen’ and minimum corporate tax will be introduced. The savings package will be announced by Vice President Cevdet Yılmaz and Treasury and Finance Minister Mehmet Şimşek at the Presidential Complex on Monday.


Accordingly, Şimşek, who held a meeting with private sector representatives at Çırağan Palace in Istanbul yesterday, said that public expenditures will be ‘frozen’ and that there will be a minimum corporate tax at the Organisation for Economic Cooperation and Development (OECD) standard. Şimşek suggested that tax exemptions will also be abolished.

The minister emphasised that taxes – including corporate tax – will not increase but ‘the rules will change’.

The measures led by Vice President Yılmaz aim to save 100 billion liras. With the austerity measures, expenses in public institutions will be calculated item by item and expenditures will be minimised. Public institutions and organisations will not rent buildings and vehicles unless necessary. Additional rented buildings and vehicles will be determined according to need. Events such as promotion and training organised in different provinces at different times of the year will be suspended. Stationery expenditures will be reduced, correspondence will be made in digital environment. Investments with 65 per cent completion will be completed, but new investments will not be started. Special quotas will be limited in guest houses and social facilities affiliated to public institutions. In addition, social responsibility projects for the benefit of society and the public will be implemented. Energy saving will be implemented in public buildings.

Mehmet Simsek: We will announce the savings package on Monday

Treasury and Finance Minister Mehmet Şimşek said, “We will take steps on many issues related to public finance in the coming period. On Monday, we will announce the savings efficiency package together with our Vice President”.


Stating that they will take steps on many issues related to public finance in the coming period, Şimşek continued his words as follows:

“On Monday, we will announce the savings efficiency package together with Mr Vice President. This will not be the first or the last. We will continue to work on how we will strengthen this disinflation programme and process in the coming period with our intensive efforts. Therefore, the programme is working and will continue to work.”

Minister Şimşek reminded that the Central Bank made very broad evaluations about inflation yesterday (9 May) and used the following expressions:

“They are doing a very good job. The team is very strong. Now I would like to underline that the expectation of those who know this business in the market is that inflation will decrease to around 35 per cent in the next 12 months. This is slightly above our predictions. But we believe that as inflation falls and gains downward momentum, the gap between the market projections and our targets will close. Because we are determined on this issue. We will bring Turkey to price stability.”


Stating that the way to permanently increase the welfare of citizens is to “control inflation”, Şimşek said, “Otherwise, we will always be in this spiral. Therefore, our top priority is to reduce the pressure on the cost of living of our citizens. Our most important goal is to reduce inflation to single digits. We will do whatever is necessary for this. We will take whatever measures are necessary for fiscal policy,” he said.

Simsek also said, “We will not increase the income tax and corporate tax”.