Turkey Proposes Debt and Fine Restructuring to Support Companies

(Bloomberg) -- Turkey’s ruling party laid out details of a plan to restructure some debts and administrative fines in an effort to support companies under pressure from the coronavirus crisis.

The plan includes tax debts, administrative fines and social security payments. The proposal amounts to about 500 billion liras ($63 billion) of restructuring, Mehmet Mus, the AK Party’s parliamentary whip, said on Friday, according to the Sabah newspaper.

Read More: Turkey Plans Corporate Tax Cut to Boost Pandemic-Hit Firms

The proposed bill has been approved by the planning and budget commission of parliament. The proposal includes debts to and fines by ministries and institutions as of Aug. 31. Judicial fines, penalties issued by supreme boards and fines related to Covid-19 measures will be exempt from the bill.

Details of the plan:

• Includes debts and fines to the Treasury, Ministry of Commerce, Social Security Institution, municipalities, provincial private administrations, Industry Ministry, Union of Chambers and Commodity Exchanges of Turkey, Bar Association, SME Development Organization, development agencies, and General Directorate of Foundations.
• Only 50% of debt and updated interest rates owed to the Social Security Institution will be paid, with the rest forgiven.
• Restructured debt could be paid in installments of up to 18 months. Payments of two installments are required to be eligible.
• Payments on the restructured debt to start in January for debts to the Treasury and Finance Ministry, Ministry of Commerce and Special Provincial Administration, and in February for debts owed to the Social Security Institution.

©2020 Bloomberg L.P.