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Lira Jumps as Corporate Tax Break Provides Boost

TURKEY
  • The lira strengthened the most among its emerging market peers, boosted by a new tax break for companies that convert their assets into the currency.
  • government published the law that provides tax exemptions for firms that switch assets out of foreign currencies in its official gazette on Saturday.
  • Under the program, participating companies won’t have to pay income tax on gains when they move funds into FX-linked lira deposits being promoted by the government.
  • The incentive is likely to attract strong interest from companies as it brings them a tax advantage without causing any loss in liquidity, according to Virtus Glocal Consulting’s chief strategist Inanc Sozer. “It will also strengthen central bank’s reserves. We’re at the beginning of a rally that will likely lift the lira to its highest levels of 2022,” he said.
  • Turkey’s Treasury and Finance Minister Nureddin Nebati expects the measures could result in $10 billion in corporate assets being converted to lira, according to people who attended a meeting between the minister and economists on Jan. 22.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
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MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
BulletEM BulletEmerging Market NewsHomepage

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