Gov’t defers tax payments for firms hit by Syrian crisis

Gov’t defers tax payments for firms hit by Syrian crisis

(Photo: Cihan)

April 29, 2012, Sunday/ 17:15:00

Turkey is trying to ease the burden on firms that have suffered considerably due to the tension in Syria by offering deferment plans for taxes.

In answer to a written question regarding the steps the Ministry of Economy has taken in this connection, submitted by Şefik Çirkin, a deputy from the National Movement Party (MHP), Zafer Çağlayan, minister of economy, said in a written statement that the Ministry of Finance has decided, as per regulation number 52 concerning a tax procedure law issued on March 8, to allow firms that have suffered financial losses on account of the ongoing crisis in Syria to benefit from the “act of God” criteria regarding their tax payments.

For the firms in question, the regulation means they can suspend their tax payments until the trade situation returns to normal. The regulation covers only the present-day tax obligations of the firms and not earlier ones. The Ministry of Finance has also declared Syria, along with Libya, as a politically risky country, enabling firms that have production facilities there to defer payments they are supposed to make as per law no 6111 until the conditions of the “acts of god” criteria disappear.

As of March 30, 136 Turkish firms have applied to the Syria Watch Unit established in the Ministry of Economy to inform the ministry of their financial difficulties. Nine of the applications are related to security issues, while 127 of them have to do with problems the firms have had in trading with Syria because of the ongoing turmoil and Turkey's deteriorating relations with that country.

The problems firms suffer from are varied. Some companies with production facilities in Syria have difficulty in keeping production going due to the turmoil, which causes security problems and skyrocketing costs. Transporters are victims of the rising cost of transportation, with Syria having raised customs duties and doubled transit fees for Turkish trucks. The number of truck owners who have had to sell their trucks because they are no longer able to keep up installment payments on their trucks is not negligible.

Among the applicants to the Syria Watch Unit in the ministry, there are firms that have already transferred goods to the Syrian side but that are unable to collect the related payments because letters of credit have not been confirmed. And other firms that have completed their undertakings in Syria can't get back their letters of guarantee.

In 2011, the number of firms exporting to Syria was 3,269, which dropped to 538 in the first two months of 2012. The number of Turkish firms importing from Syria was 644 in 2011, but dropped to 108 in the first two months of 2012. Total Turkish investments in Syria amount to nearly $1 billion.

In an effort to find alternative routes to reach countries in the Gulf but bypassing Syria, Turkey has recently signed a memorandum of understanding with Egypt in Ro-Ro and land transportation. The first Ro-Ro ship arrived at Egypt's Port Said late on Saturday, with 23 trucks onboard carrying food items to Saudi Arabia.

Business
Other Titles
Click For More News