Turkey to protect local businesses from e-commerce giants

FILE PHOTO: Turkish Finance Minister Berat Albayrak announces his programme to fight inflation, in Istanbul, Turkey October 9, 2018. REUTERS/Murad Sezer/File Photo

ISTANBUL (Reuters) – Turkey will take steps against international digital commerce packages that avoid taxes, Finance Minister Berat Albayrak said on Wednesday, in a move to support local manufacturers.

Ankara has taken measures in recent months to reinvigorate slowing economic activity, including in the areas of taxation and incentives to help manufacturers after the lira lost some 30 percent of its value against the dollar last year.

Albayrak said that in 2018 Turkey received 26 million articles of mail registered as letters from just one country, suggesting this was not actually correspondence.

“There are different things coming out of these packages which show up as letters. What about taxes?” Albayrak said in a speech to Tax Council Meeting.

“We have to take necessary steps to support our local economy and competitive advantage…We will react strongly to this issue with digital taxation, taking into account these anomalies and abuses which threaten the world.”

E-commerce, or online trade in goods and services, has become a huge component of the global economy.

In 2017, Turkey’s e-commerce market was worth 42.2 billion lira ($7.97 billion), largely composed of retail and travel transactions, according to a report by Deloitte and Turkey’s Informatics Industry Association (TUBISAD).

Turkish authorities charge customs tax of up to 20 percent on orders coming from abroad if the declared value of the packages exceeds 22 euros ($25).

Turkey has major potential for e-commerce with a population of 82 million people and a median age of 32 – younger than any other country in Europe. By 2040, the population is expected to swell to 100 million.

($1 = 5.2941 liras)

(Reporting by Nevzat Devranoglu; Writing by Ezgi Erkoyun; Editing by Daren Butler/Mark Heinrich)

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