“VAT reduction creates a positive effect”

vat reduction creates a positive effect 0


Details of the new VAT applications announced by President Recep Tayyip Erdoğan have been announced.

VAT reductions were made in multiple areas such as basic needs products, housing sector, land and land deliveries, hotel services, seeds and saplings.

On the other hand, an increase in the VAT rate was observed in second-hand automotive purchases and sales. We have seen a similar process in the near term in the reduction of the VAT rate on food products from 8 percent to 1 percent.

During the period of intensification of price controls, there was no significant decrease in prices due to the rise in inflation.

Does VAT reduction affect publicly traded companies positively?

Different interpretations stand out about how much VAT reductions realized in more than one item in question will be reflected in the sales amount of companies. Some publicly traded companies and analysts think that the new VAT applications announced may have a partial positive effect on the shares of some companies. The information, evaluations and comments that Bloomberg HT Research unit has obtained from some publicly traded companies are as follows;

Reducing VAT to 8 percent on basic necessities such as medical devices, baby diapers, detergents and soaps, and food and beverage; It may have a partial positive effect on retail companies, medical equipment manufacturers and distributors and tissue paper products. (BİM, Şok Marketler, Bizim Toptan, Migros, Europap Tezol, Eczacıbaşı İlaç)

Retail expects a positive impact

According to the information obtained by retail from industry leaders;

– Since the determined products are basic needs, they will have a positive effect on purchasing power. On the other hand, since the price elasticity of the determined products is lower, an increase in consumption may not be expected. It can be considered positive as it contributes to purchasing power.

– The decision taken for all consumers is a positive one and will enable more consumers to access a wider range of products. The decision taken can be read as a positive development for both consumers and retail companies like us.

– It is thought that as a result of the VAT reduction, many products will be reduced to more accessible prices, which will increase the demand, and this will have a positive effect on the sector and companies. In addition, it is stated that the share of organized retail will increase as the relative VAT advantage of informal markets that sell without invoices will decrease, and this will reflect positively on chain markets. As the prices come back, the preference for branded products will increase.

The increase in automobiles will not affect negatively

With the profits of car dealers in the purchase and sale of vehicles, VAT, which was 1 percent in the sales of yachts, quotations, boats and cruise ships, increased to 18 percent. .

– The development is not expected to have a major negative impact on the sector. It was also pointed out that there is more than one variable in the sector that should be taken into account.

Positive contribution to cash flow in housing

Comments of sector representatives regarding VAT simplification on residences and land and VAT rate reductions on their deliveries;

– In the projects planned to be done in the next period, the feasibility must be done from the beginning. The development may contribute positively to the valuations and cash flows of the sector. In addition, it creates a positive effect on the balance sheet and equity, with ease in doing business, but does not create a discount expectation in house sales.

– It cannot cause any change in the sales prices per square meter, but since the VAT added to the sales price will decrease, it will be positively reflected in the final sales price of the house.

Hotel services 8 percent

The VAT rate applied as 18 percent in places such as three-star hotels and above will be applied as 8 percent in all of these services.

– VAT reduction is expected to have a positive impact on tourism as in all sectors in general. It will reflect positively on the sector as it will support the purchasing power of domestic tourists with VAT reduction.

Support for turnover in agriculture

All certified seeds and saplings will be subject to 1 percent VAT

– As in all sectors, VAT reduction will create turnover in us. contributes positively, can support the increase of sales.

About admin


Check Also


Biden’s statement on the 1915 events

US President Biden made a written statement regarding the 1915 events. Biden, in his statement, said, "The Ottoman authorities arrested ...

Leave a Reply

Your email address will not be published.