ANKARA - Though found unsatisfactory by many, the successive ’stimulus measures’announced by the government may extract a heavy toll on the budget soon. The measures are estimated to cost 54.37 billion liras. The figure becomes more alarming considering current budget deficits
The measures taken include constrictions on revenue, expenditure and other fiscal measures that will have indirect effect on budget, according to government’s Pre-Accession Economic Program.
Various privileges the government provided to Turkish people living abroad when urged them to repatriate their money, reduction in the value added taxes, private consumption taxes, title deed fees and Resource Utilization Support Fund, or KKDF, as well as application of incentive system, the cost of all that added up to a financial burden of 14.22 billion liras for the three year-long-period, from the beginning of 2008 to the end of 2010.
Relieving employers by reducing security premiums
A big portion of the measures in revenue was provided by a discount of five percentage points in employers’ share of Social Security Authority, or SSK, premiums.
The cost of that reduction was calculated to reach 3.36 billion liras in 2009 and 3.96 billion liras in 2010.
The cost of three-month-long discounts in value added tax, or VAT, private consumption tax, or ÖTV, and title deed fees was calculated to reach 2.74 billion during the period covering three years.
Some 240 million of that total was generated by the privileges provided to the local investors for their stock earnings. ÖTV implemented on Internet was reduced from 15 percent to 5 percent, bringing about 210 million also helped generate the debt.
ÖTV reduction in motor vehicles was 600 million liras, while 80 million liras was generated by ÖTV cuts in white goods. VAT reduction in housing generated 500 million liras of that 2.47 million liras, while VAT reduction in title deed fees formed 481 million liras.
Infrastructure projects add to mounting costs
Measures taken in expenditure also cost the government a whopping 27.58 billion liras. Southeastern Anatolia Project and other infrastructure projects and irrigation systems generated 8.71 billion of that cost. That is because the government had utilized extra resources of 19.4 billion for those projects.
The increase in public employees’ salaries was the second biggest contributor to the government’s costs. That added on another 6.11 billion liras to the costs.
A 50 percent increase in the share-the-work allowances as well as the prolonging period for receiving those allowances also contributed 1.53 billion to the government’s rising cost.
Transfers implemented to local administrations from Central government revealed a cost of 5.59 billion for the period.
The cost of fiscal measures that would not have an immediate or direct impact on the budget for the three-year-long period is also expected to reach 12.77 billion.
Governments worldwide face similar problems, as successive stimulus packages are said to unleash a period of high inflation in the future.