Turkey eyes social security amnesty worth $42 bln

The Ministry of Labor prepared a facility of payment regulation to ease the burden of debt repayment. The Social Security Institution which includes both SSK and Bag-Kur members owes 9 billion YTL ($5.9 billion) and 33.1 billion YTL ($21.8 billion) respectively in unpaid premiums.Â

 

Minister of Finance Kemal Unakitan denied on Thursday that such an issue had been discussed between his ministry and the Ministry of Labor. "We had a brief discussion with the labor minister, but I have not seen any bill prepared on the issue." said Unakitan, in response to a question from reporters upon his arrival at parliament.

 

In a previously amnesty offered by the government in 2006, a late fee was implemented to previously unpaid debts; the new regulation is expected to be in line with the previous amnesty. According to the regulation, outstanding debts will be updated against the current inflation rate and the total sum will be made payable in installments.

 

This decision contradicts the latest letter of intent sent in the end of April by the government sent to the International Monetary Fund (IMF). As part of the discussions regarding the new IMF stand-by deal, the government had said it would not offer an amnesty on social security debt.

 

This latest amnesty decision by the government is expected to cause conflict between Turkey and the IMF. Turkey has also delayed making a decision on a new IMF stand-by arrangement to replace the previous loan agreement that expired on May 10. Â