Türkiye outlined details on Monday of a broad package of incentives that top officials say is aimed at boosting competitiveness and attracting investment, and also positioning its biggest city as a leading financial gateway across the region.
Describing the planned reforms as "not an ordinary incentive package," Treasury and Finance Minister Mehmet Şimşek said the measures amount to a comprehensive "tax architecture."
"This is a full-spectrum structure covering goods, services, capital, talent and activities. Our priority is to move Türkiye into the top league in terms of global investment attractiveness," he told a press conference in Ankara.
Şimşek said Türkiye was extending a tax exemption on services exports to 100% to target high-value sectors like software, gaming and medical tourism.
At the same time, it is reducing manufacturing exporters' corporate tax rate to 9% to boost competitiveness and attract foreign direct investment (FDI), he said.
The tax reductions are long-term and "here to stay," he told reporters, days after President Recep Tayyip Erdoğan first floated the comprehensive legislative package including the tax plans.
The package aims to increase the country's competitiveness and overall economic appeal, Erdoğan said.
Ankara introduces it at a time when the U.S.-Israeli war with Iran rattles Gulf states, prompting some companies and banks there to consider other options.
Asked about this, Şimşek said the package was not meant to take advantage of war fallout and was in the works long before.
Some of the incentives, including zero corporate income tax on transit trade, are focused on the companies located in the Istanbul Financial Center (IFC), a state-backed clutch of glassy towers on the city's Asian side.
The rate is 95% for those located outside the IFC, Şimşek said, noting it was set at 50% in years past.
Speaking at the same event, Vice President Cevdet Yılmaz said the package is designed to provide a "clear and reliable framework" for investors seeking stability in an uncertain global environment.
Yılmaz added that companies establishing regional headquarters in Türkiye would benefit from substantial tax exemptions and also said a centralized mechanism would be introduced to accelerate large-scale foreign investments and streamline administrative processes.
The package aims to "export more goods and services, attract more talent, entrepreneurs, capital, a new home that's more encouraging local citizens to use Türkiye as a center of their activities and... placing IFC as one of the key regional hubs," Şimşek said.
This month, the IFC's CEO Ahmet Ihsan Erdem told Reuters that the Iran war prompted dozens of companies with operations in the Gulf to consider moving business there.
The exporter incentives include what Şimşek called a "radical step" toward reducing the corporate tax rate.
