Dervis: A Decrease In V.A.T. Rate In 2002 Seems Impossible

BURSA, Feb 18 (A.A) - State Minister Kemal Dervis said on Monday that it was impossible to decrease the value added tax (VAT) rate in 2002.
Dervis visited TOFAS motor vehicles factory and got information from the factory officials.
When one of the factory workers complained about high tax rates, Dervis said that excessive tax rates would be decreased in course of time, but it was important to prevent this from causing a loss in revenues.
Noting that they were aware of problems of the automotive sector and they were trying to overcome those problems gradually, Dervis said that first of all, the domestic market should be revived.
When a worker asked whether or not VAT rates would be decreased, Dervis said, ''it seems impossible this year. The temporary decrease in November-December period of last year was beneficial, but it is a temporary benefit. The important thing is to grant tax system a completely sound structure. We wish to decrease the VAT rates, but it is very difficult to do it this year.''
''We will revive the economy step by step in 2002 and we will grow rapidly in 2003. Meanwhile, we will also beat the inflation in this period. Interest rates of consumer loans are very high. We are working with the Central Bank and other ministries. Such high interest rates make it difficult to expect a sound revival. Consumer loan interest rates should decrease. However, decrease in interest rates should not cause a crisis in finance market,'' he said.
Later, Dervis visited Sonmez Holding's ASSF and Cotton factories.
DERVIS: TURKISH ECONOMY CAME VERY CLOSE TO THE EDGE OF THE CLIFFS LAST YEAR
State Minister Kemal Dervis has said that the Turkish industry was going through a transformation process and it was no longer depending on the cheap cost of natural sources but rather depending on information, when he spoke at a meeting at Bursa Trade and Industry Chamber (BTSO).
Dervis said that Turkey had to use technology effectively in order to reach economic prosperity.
''It's been a year since I returned to Turkey,'' he said. ''2001 was a very tough year. We went very close to the edge of the cliffs because of the chronic inflation and debts. Fortunately, we were able to get away from the cliffs,'' he said.
''It could have been worse. Turkey had a very high level of debt. We finished last year with a debt load of 90 percent of the national income. It wasn't really easy to steer towards economic recovery from such a sitution,'' he said.
Dervis said that Turkey managed to increase its current balance of ten billion U.S. dollars from minus ten to plus three in just one year in 2000. This resulted in a sharp decreased in imports but an increase in exports. Dervis said that through a new currency system, Turkey achieved to change its disrupted foreign trade and current balance, an accomplishment that could be enjoyed by a few countries.
Turkey's second important achievement was in public finance, Dervis said. He explained that the government was able to reach its targets in debt management and income-expenditure balance.
Despite Sept. 11 attacks in the United States, Dervis said that Turkey reached its target of having a non-interest surplus equal to 5.5 percent of national income.
Dervis said that Turkey's third achievement was the structural reforms adding that many laws on economy management were changed last year and Turkey ushered the new years with a new legal background.
Dervis stated that the credit provided by the IMF to Turkey was not a donation but a loan and pointed out that it was an attractive credit for Turkey because of its low interest and long maturity term.