Türkiye will increase the minimum monthly pension payment by 25%, more than triple the fee local passengers are required to pay before traveling abroad and impose a minimum corporate tax on large multinational companies, a ruling party official said on Tuesday.
The minimum net pension will be lifted to TL 12,500 ($378) from the current TL 10,000, Justice and Development Party (AK Party) parliamentary group Chair Abdullah Güler told reporters in Ankara.
The adjustments are part of the drafted new tax proposals that the government sent to Parliament on Tuesday. The AK Party and its allies hold a majority in the Parliament.
The regulation will affect 3.7 million of Türkiye's 15.8 million retirees and will bring an additional cost of some TL 33 billion to the country's 2024 budget, Güler said.
The government had earlier said it had no plan to increase this year's minimum monthly payment, citing its policy tightening and savings plans meant to curb soaring inflation.
Annual inflation dropped to 71.6% in June from a peak above 75% in May, beginning what is expected to be a sustained downward trend. The central bank has kept its policy rate at 50% in recent months after an aggressive tightening campaign and sees inflation ending the year at around 38%.
Under the draft law proposed by the AK Party, only the minimum pension payment would rise with no increase for retirees earning more.
The bill also includes new savings plans aiming to strengthen fair taxation, including a minimum corporate tax.
A minimum 15% corporate tax will be imposed on multinational companies that have more than 750 million euros ($817.58 million) in annual consolidated revenue, according to the draft bill, confirming earlier comments by the Treasury and Finance Minister Mehmet Şimşek.
The bill also imposes a 10% minimum corporate tax for local companies.
A new income tax model will be introduced for commercial and self-employment earnings in which their declarations and incomes will be compared, according to the draft.
If the earnings of the taxpayers exceed 20% of their declarations, they will be questioned by tax authorities. "This regulation aims to ensure tax security and reduce informality," the draft bill said.
The draft increases tax penalties for informality.
The plan also raises corporate tax for companies that run public-private partnership projects, including new bridges and highways, to 30% from 25%.
The fee that Turkish citizens flying abroad are required to pay will be increased from the current TL 150 to TL 500, said Güler.
"It will be increased each year based on the revaluation rate," he noted.
The government has already announced major spending cuts as it moves toward stricter fiscal policies.
The nation's budget has been considerably plagued by a sharp increase in spending after devastating earthquakes struck the southeastern region in February last year.
That fueled a budget deficit of about $45.5 billion in 2023, or 5.2% of gross domestic product (GDP).
The first six months of this year have seen a gap of TL 747.18 billion, official data showed on Tuesday.
The annual shortfall is projected to be TL 2.7 trillion, or 6.4% of GDP, according to the government's estimates.
