MÜSİAD President Mahmut Asmalı commented on current economic developments. In his statement, President Asmalı stated, "The steps taken to ensure fiscal discipline should be considered as an opportunity to implement reforms in the tax structure." Chairman Asmalı stated the following:

"It is clear that the public budget is under significant financial pressure due to the economic fluctuations experienced in recent years, the transfer and investment expenditures incurred following the pandemic and natural disasters. Indeed, the increase in budget expenditures has accelerated due to the negative global events and the impact of the election process.

The cost of the earthquakes that occurred on February 6, 2023, dubbed the "Disaster of the Century," and the heavy cost of reconstruction are well known to the entire society. According to official figures, the total economic cost of these earthquakes, which affected 11 provinces, is $104 billion.

The rapid reconstruction of cities is crucial for the region's social and economic life to return to normal. In this context, our state aims to build 650,000 houses in total, 319,000 in the first year.

In light of all these developments, it is essential that the resulting costs be shared fairly by all segments of society, in line with social solidarity. However, the most critical actor in this process will be the public sector, as earthquakes will be the public sector." This will place a significant additional burden on the Turkish Treasury's finances.

In this context, the Ministry of Treasury and Finance has implemented the National Solidarity Package, a significant step towards ensuring budget discipline.

We certainly welcome the need for initiatives aimed at generating additional tax revenues to sustainably offset the economic costs of the earthquake through public resources. As MÜSİAD, we would like to reiterate that we will continue the solidarity we have maintained with our members since the earthquake.

However, when considering changes to tax policy, it is crucial to implement a tax policy that prioritizes and embraces tax justice by considering two closely related issues: inflation and income distribution. Considering that indirect taxes such as VAT and SCT will have a greater impact on lower-income groups, preserving the exemption scope for basic food and essential goods is crucial for income distribution and social well-being.

At this point, indirect tax increases levied on expenditures, which will impact cost inflation on producers, must be implemented gradually and in line with governance principles by relevant parties. Before implementing regulations, The potential impacts on production, employment, inflation, and exports, particularly in the context of international competitiveness, should be analyzed in detail.

Furthermore, structural reforms, such as eliminating imbalances between direct and indirect tax burdens, need to be implemented swiftly and decisively. In this context, these steps taken to ensure fiscal discipline should be considered an opportunity to implement tax structure reforms, and the announcement of action plans in this regard should be accelerated.

Given the need for direct tax revenues, it will be extremely valuable for our government to develop its capacity in this regard and to adopt an approach that will not affect tax payment behavior or disadvantage taxpayers when implementing new tax amnesties and existing exemptions.

As representatives of the business world, we believe that predictability in monetary and fiscal policies is one of the most important factors for increasing investment and employment. Therefore, it is crucial to share with the public policy documents such as a revised Medium-Term Program or Macro Stability Plan, which will provide all economic actors with a transparent view of medium- and long-term economic planning. It is crucial.

Finally, the effective management of public expenditures is critical. The Circular on "Savings Measures" in the public sector, published in the Official Gazette on June 30, 2021, must be meticulously followed and implemented. In this context, the Circular sent to public institutions by the Ministry of Treasury and Finance on July 17, 2023, regarding the rationalization of government expenditures, was welcome. Saving public expenditures that lead to waste and inefficiency and directing these resources to necessary and efficient spending areas will benefit not only budget discipline but also economic development.

With over 13,000 members, MÜSİAD has been working with the same enthusiasm for 33 years for the social and economic development of the country through a total of 169 contact points, 84 in Turkey and 85 in 71 different countries.

On this occasion, as MÜSİAD, we would like to express our commitment to the new economic management