Shopkeepers found the VAT reduction on food positive

The President of the Confederation of Turkish Tradesmen and Artisans (TESK), Bendevi Palandöken, stated that they found the decision to reduce VAT to 1 percent on basic foodstuffs positive and said, "We expect the prices of basic foods to decrease. Businesses should reflect the VAT reduction on prices."

In his written statement, Palandöken commented on President Recep Tayyip Erdogan’s statement: "Within the scope of our VAT System Simplification Program, we are reducing the VAT, which is 8 percent on basic food products, to 1 percent."

Stating that the shopkeepers have been waiting for a VAT reduction on basic food for a long time, Palandöken said, "We find the VAT reduction very positive. We expect the discount to be reflected in the prices, and the prices of basic foods to decrease. Businesses should reflect the VAT reduction in their prices. Starting from Monday, it should be very well controlled whether the VAT reduction is reflected in the prices. The discount will also affect the tradesmen. "If the costs do not continue to increase, this VAT reduction may be the beginning of a return from the summit in price increases."

Expressing that they do not expect a revenue loss in the Treasury with the VAT reduction, Palandöken argued that there will be an increase in tax revenues on the contrary.

Palandöken emphasized that the VAT rate in wholesale and retail sales will be equalized, the tax burden on tradesmen will decrease, and with that informality will also decrease.

He added, "With the decrease in the informal economy, the revenues of the Treasury will increase even more, but the VAT rate should be the same not only in basic food, but also in all food products. If the VAT rate on food products was the same, both VAT applications would be easier and informality would be reduced to a large extent. In the same way, if VAT is reduced to 1 percent on the cleaning and carbonated beverage products it demands, inflation will decline sooner."