That’s what most Turkish political parties offer the voters.
Considered the most likely party to be in power after the election, the AKP prefers to be deliberate in its promises and just gives a basic outline of its economic policies. Lessening the tax burden and preparing the youth for life with the help of resources that will be gained from the Unemployment Insurance Fund are among the most noteworthy promises of the AKP.
The CHP, MHP and DP, on the other hand, have assertive promises directly targeting the lower income group.
Some of the plans:
TAX REFORM
The aim is to lower the tax burden
AKP
Tax on transactions, stamp tax being the first, will be gradually annulled in order to settle the document system.
The tax burden on commission costs will be gradually lessened.
The tax and premium burden on the employer will be lessened.
The tax burden that increases input costs will be lessened to a minimal level.
CHP
Tax will be collected according to the income of individuals.
The rate of income tax for artisans and craftsmen, and wage earners will be five points lower than other taxpayers.
No private consumption tax (ÖTV) will be charged on diesel, thus its price will be reduced by 50 percent.
The tax burden on employers will lessen…
UNEMPLOYMENT
AKP
The employer premiums paid to the Social Security Institution (SSK) for employing the disabled will be paid by the Treasury.
The SSK employer premium will be lowered by five points by 2008 and it will gradually decrease.
The Unemployment Insurance Fund will be used for improving employment conditions. The unemployed will benefit from this fund for a longer period. The active workforce programs will be granted YTL 200 million from the fund annually.
Youth who want to establish their own business will be granted funds and free space.
CHP
The rate of unemployment will decrease by 50 percent within five years.
Financial support will be given to youth who want to establish their own business and to women who want to earn income from handicrafts.
It will be easy to benefit from the Unemployment Insurance Fund; the wages will increase. Funds will be the resource for the struggle against unemployment.
A ‘citizenship right’ of YTL 300 will be paid to poor families if no family member is employed…
DP
The establishment of one million new SMEs will provide employment for five million people.
Low-interest credit will be given to women who want to start a business.
120,000 people will be employed as seamen within 10 years.
The Unemployment Insurance Fund will be restructured.
Sounds nice huh? The only problem: “It is worth noting that the DP, unlike the other parties, provides information about the funding and timing for its promises.”
When reading the list of promises, I could not help but think, “they can never do this.” So I asked a Turkish person and she said “we are used to empty promises by now.” It is a sad thing of course.
Looking at the list of promises, and the history Turkish political parties have (regarding making promises but not keeping them), makes it much easier to understand why the AK Party appeals to so many people. It might be a moderate Islamist party, but it delivers. The economy has greatly improved under Erdogan’s rule. Inflation went down from 85% (yes 85%) in 1997, to 7.7% in 2005 and 9.7% in 2006.
The unemployment rate did not improve significantly during the last four years. It is still quite high: approximately 10%. This should – obviously – be a priority. A good way of fighting unemployment is – again obviously – lowering taxes. The taxes in Turkey are:
* The tax system in Turkey is progressive. In other words, the higher your income, the higher the rate at which you will pay tax.
* The 2006 individual tax rates vary from 15% – 35%..
* in 2006 the standard rate of Turkey corporate tax is 20%.
* Note: from 1.1.2004 the surtax of 10% was abolished in Turkey
More specifically:
Tax% – The Tax Base (YTL)
15 – 0-7,000
20 – 7,001 – 18,000
27 – 18,001- 40,000
35 – 40,001 and over
The 35% and 27% could be lowered, slightly, but overall, there is not much to cut here. In the Netherlands, our highest rate is 52%. We can cut bigtime. In Turkey, however, the situation is quite different.
Overall – there really is not that much to do in Turkey right now. It seems to me that the Turkish government should refrain as much as possible from pursuing great changes / reforms. Consolidate and make the economy more stable. Inflation rates have to pushed down, unemployment rate same. The next four years should be used for these purposes: push down the inflation rate and unemployment rate, and let the economy continue its (unprecedented) growth. The time is not there – it seems to me – for the Turkish government to help its poor more actively.
Cross posted at my own blog.
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