PodcastCoronavirus shield package offers Turks tax deferrals with interest, time off without pay
Turkey’s financial “shield package” against the blow of the coronavirus might be forcing small businesses into more debt. Turkey’s preventative measures will allow for 100 billion Turkish Liras’ worth of loans and debts to be deferred with interest for three months.
Sinan Saygılı / Duvar
Turkey’s “Economic Stability Shield’ package worth 100 billion Turkish Lira effectively forces loans on small and medium size businesses under the guise of a tax deferral as small enterprises struggle to stay afloat amid the coronavirus outbreak.
Turkey’s preventative measures will allow for 100 billion Turkish Liras’ worth of loans and debts to be deferred with interest for three months, possibly forcing business owners into even more debt after having little to no business.
Banks have also offered clients the option to defer their credit card payments.
The added interest rate for credit card payments as well as residential loan payments will be an average of 1.4 percent.
However, the added interest rate will remain the same as the original on residential and auto loans.
Turkey suspends tax payments for millions over coronavirusCitizens can apply for payment deferrals by calling their banks or through online banking.
Turkey has a total of 115 billion liras in credit card debt, 209 billion liras in residential loans and 290 billion liras in personal loans, the Banking Regulation and Supervision Agency (BDDK) reported.
Meanwhile, thousands of workers in retail have been forced to go on leave without pay when their workplaces closed, creating anxiety around the possibility of mass lay-offs.
As compensation, parliament reduced the number of days of insured labor that is required to apply for an unemployment pension: It will be required to have worked, with insurance, for 450 days in the past three years to apply, a number that is normally 600.
“They need to dismiss the requirement of days,” said Ergun Atalay, Chair of the Confederation of Turkish Trade Unions (Turk-Is). “Even someone who worked for one day should be eligible right now.”
Bosses close to Turkey's AKP put workers on unpaid leave amid coronavirusThe amount of the unemployment pension is barely enough to feed a family and should be increased, Atalay added.
Unemployment pensions range from 1,177 (about $300) liras and 2,354 liras (about $400) in Turkey.
Why is a ‘force majeure’ that allows tax deferrals relevant during the virus outbreak?