Experts Commented on the New Incentive Package
Experts commented on the New
Incentive Package. Experts spoke to
Bloomberg HT on the issue.
As the terms of the incentive packages for the coronavirus epidemic are about to expire, AK Party Group Deputy Chairman Mehmet Muş announced that they submitted to the Parliament regarding the new incentive package. The said law proposal means that the period of normalization support provided after the end of short work can be extended until June 30, 2021 by the Presidential decision, and if additional employment is made to the lowest number of insured between January 2019 and April 20, 2020, the SGK premiums will be supported by the Unemployment Insurance Fund. It includes the imposition of an income and stamp tax exemption for service providers who agree to work part-time in order to meet the needs and increase new employment.
Speaking to Bloomberg HT about the aforementioned proposal, Habertürk Writer Ahmet Kıvanç stated that the employment incentives will end in 2020, so they expect these practices to be extended again.
Ahmet Kıvanç stated that according to the new incentive package, the President was authorized to extend the premium support application until December 31, 2023, and stated that the premium support provided to businesses that provide additional employment could be extended until the end of 2023. In addition, Kıvanç stated that the end date of the application of the short work allowance could be postponed until June 2021, and that the normalization support of the companies benefiting from this allowance could be extended until June 30, 2021.
Another expert who made an assessment on the subject was KPMG Company Partner Emrah Akın. Speaking to Bloomberg HT, Akın stated that there is a regulation in the proposal that encourages partial work.
Emrah Akın noted the following:
“There are many arrangements in the package. Some of these were already known to the public. One of them was related to the reduction of the Corporate Tax rate. The Corporate Tax rate is falling to its normal rate of 20 percent by the end of this year. We wanted this rate to be further reduced. With this arrangement, the President will have the authority to reduce this rate up to 5 percent. Another important issue will be the Asset Peace arrangement.
There are also radical regulations regarding tax. For example, a tax exemption is defined for those who sell the goods they produce in their homes. In other words, there will be an income tax exemption in the sale of goods produced at home via the internet.
There is a regulation in the law proposal that encourages partial work. If you hire another service person for the period that the service person who accepts to work partially does not work, an income tax withholding less than 10 percent of their wages will be paid, and no stamp tax will be charged. Therefore, there are income tax incentives, withholding incentives and stamp tax incentives, which will also stimulate partial employment.
It is a very attractive application for flexible working, but I think it is not enough. Because you have a requirement to employ another employee during the periods of non-employment of the employee who benefits from flexible working and the exception is applied to both. In this case, its implementation and follow-up will be very difficult.”