Government announces economic measures

26 03 2020 12:40

Prime Minister Ersin Tatar announced on Wednesday evening the government’s economic measures and support package to deal with the impact of the coronavirus pandemic on the TRNC economy.

Announcing the 33-point austerity package at a press conference at the Prime Ministry, Tatar said that the measures adopted will create 1.5bn Turkish Liras in revenues needed to mitigate the economic impact of the crisis.

Tatar, summarizing the various measures in place, said that all the decisions adopted by the government were aimed at ensuring the health of the public.

“The measures we have adopted are aimed at this. Of course, these measures will have economic consequences. That is economic activity has been severely restricted,” he said.

According to the measures, all public-sector salaries above 5,000 TL will be slashed by 25 per cent for three months.

No cuts will be made to salaries lower than 5,000TL

Those who receive a salary of 6,000TL and lower will experience a 16 per cent cut.

He added that the highest public-sector salary will not exceed 8,500 TL and that the Prime Minister, ministers, MPs and other high ranking public servants will experience cuts up to 56 per cent.

The salaries of public servants who have been carrying out essential services will not be touched, the Prime Minister said.

A fund will also be created from the 100m TL resources to be obtained by banks.

The inflation based cost-of-living expenses increment given to public servants twice a year will also be frozen from March 2020 to June 2020.

Other austerity measures will include cutting down on overtime payments and other extra expenditures.

All state contributions made to public institutions, municipalities and political parties will also be slashed by 25 per cent on the condition to be paid at a future date.

Tatar said that they will be allocating 750m TL to support the real sector.

Businesses which shut their establishments, in line with the Council of Ministers decision, as part of measures to contain the spread of the coronavirus should they be unable to make their due rent will be given the option to postpone payments to June and to pay their overdue rent in instalments within six months.

Special loan and donation schemes will be made available for farmers and animal breeders to address any problems which may arise in production.

Among other steps, the state will cover the interest charged on bank loans owed by businesses which closed down due to the outbreak and which opt to postpone their instalment payments for three months.

Legal arrangements will also be made to allow banks to raise credit card limits of customers by 25 per cent without requiring proof of income.

Moreover, customers will be able to postpone payment of their credit card bills used between March 26, 2020, and April 26, 2020, to purchase food and fuel or cover health expenses for a month without being charged any interest.

The state will also be paying all TRNC and Turkish citizen employees of private establishments shut as part of coronavirus pandemic, a salary contribution of 1,500TL through the Employment Support Fund to ensure that the businesses continue to operate without having to lay-off employees.

Taxes levied on tobacco products and alcoholic beverages will also be raised.

Withholding tax on interest on Turkish Lira income will also be raised to 15 per cent.

Also a 15 per cent cent discount will be applied to all those who pay their electricity bills for March, April and May on time.

Businesses will be given ten additional days to deposit their Social Security Department premiums for their staff.

Businesses, as Tatar announced, will be able to make the payments until March 30 2020 without any interest charged for late-payments.

A similar extension will also be granted for the Provident Fund payments until 15 April 2020.

Finally, among the measures directed towards businesses, the deadlines for various taxes such as the income tax, value-added-tax (VAT), special communication tax, have been postponed to 31 March 2020 without imposing any interest for late-payments.

On the other hand, in order to assist the people with their economic strife, Tatar said the workers of closed down establishments could also opt to postpone their mandatory premium payments to the Social Security Department for the next three months until next year without any fines or interest payments.

Those, who wish to continue to make regular premium payments, will also enjoy a ten per cent discount on their premiums.

A similar measure is also applicable for the Provident Fund contributions and those contributing to it can postpone their payments until the end of July.

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