Union of Chambers and Commodity Exchanges of Turkey

TOBB President M. Rifat Hisarcıklıoğlu and Minister of the Treasury Naci Ağbal attended the International Domestic Chains 2016 Conference and Expo held at the Golden Horn Congress Hall.

Hisarcıklıoğlu, in his speech during the ‘Turkey and retail’ segment, stated that 2016 is going to be a busy year and that there is significant upheaval in global markets.

Stating that the instability in the global economy is still ongoing, Hisarcıklıoğlu said, “The economic growth in Europe is still unable to maintain itself and there is the resurgence of recent terror attacks. Increasing acts of terror and the pain it has caused affects us all deeply. May heaven be the abode of our martyrs. We believe that Turkey is a great country. It has the power to overcome any difficulty. All that is necessary is that we close ranks; that we preserve our unity and stability.”

- The boon of prosperity must be felt equally by all

Stating that the latest indicators point to the robustness of the Turkish economy and real sector despite the upheaval in the global economy, the TOBB President reported that the Turkish economy grew by 4% in 2015 overall, however the retail and wholesale sector grew by 2.1%.

Hisarcıklıoğlu said, “This means that the sector is lagging behind the general national average. 3.7% of the 4% growth last year was from consumption. Looking at the details we see that growth is not spread evenly.The boon of prosperity must be felt equally by all. 60% of domestic consumption growth stems from transportation-communication sectors; 18% from the healthcare sector. Growth in food is only 1%. The clothing sector not only didn’t grow but shrunk by 4%. This shows that we need to take steps to strengthen the sector. Retail sector means domestic consumption. It is in contact with almost 70% of the economy. If domestic consumption is strong, it will act as a bulwark against foreign crises. Domestic chains are the driving force behind this sector. More importantly, this sector is the forward indicator of the economy. This is the best sector to show us how the economy is faring. Those present in this hall make up the community which is best familiar with the pulse of the economy. Every step we take to strengthen the sector will spread to the rest of the economy.”

- Those unable to improve productivity leave the sector

Stating that the sector will become stronger by improving its productivity, Hisarcıklıoğlu emphasized the importance of productivity, especially in difficult times.

Reporting that per capita productivity in 2015 for Turkey increased by 2.6% while wholesale and retail commerce productivity increased by 5.1%, Hisarcıklıoğlu said, “This shows that we increased productivity by almost twice that of the general economy. We’ve done our job correctly. We have to. Why? Because, the actors in this sector are in direct competition with each other. This competition directly lowers our profitability. Those who increase their productivity continue to compete.Those unable to improve productivity leave the sector.”

- VAT must be lowered to 1% for fruits, vegetables and meats

Stating that in many sectors there is great VAT ratio difference in input and output, Hisarcıklıoğlu reported that companies are unable to collect their tax returns and experience financial difficulties as a result.

“Just as the government is a hawk for its due, so should it be for its debts,” said Hisarcıklıoğlu and urged that it should be possible to for companies’ VAT returns to be appropriated from the Institutional Tax.

Stating that lowering VAT to 1% for fruits, vegetables and meats would serve to combat off the record economy as well as benefiting low-income citizens, Hisarcıklıoğlu said:

“On the other hand, there are also practices which result in unfair competition. Discount stores and private label branded goods are preventing both the growth and the brand creation of SMEs. We tell entrepreneurs to create their brands while also pouncing on those that do. If we do not put a stop to this we will lose our national industry our industrialists and producers will become subcontractors. Measures to prevent this are necessary. We know that the government is sensitive to the needs of the real sector. The steps it has taken and the 2016 Action Plan are of the utmost importance. Public administration and private sector, working in unison, I believe, can restore the country’s rapid growth tempo. We will not become lethargic. We will not ignore risks. We will not miss opportunities.”

- Minister of the Treasury Naci Ağbal

Minister of the Treasury Naci Ağbal stated in his speech that “The taxation system must be such that those active in the same fields of economy do not experience unfair competition; taxes should be at equal distance to all.”

In his speech at the opening of the second day of the International Domestic Chains Conference and Expo organized by the Turkey Retailers Federation, Ağbal stated that the retail sector is important for both the Turkish economy and the ministry.

Touching on the issues mentioned by the Union of Chambers and Commodity Exchanges of Turkey (TOBB) President Rifat Hisarcıklıoğlu in his speech regarding the job market, Ağbal stated that they are in agreement in terms of findings and concerns and went on:

“We must activate market mechanisms no matter what happens. We must eliminate shortcomings of the market in regards to legislative and practical applications. We must eliminate all calcified practices affecting business legislation. Chief among these are flexicurity, seniority indemnity, business law. Courts are outputting decisions which permanently and adversely affect markets. It is important to restructure business courts in this regard. The Business Law is in need of reform. Courts make decisions according to legal provisions. If legal provision are not clear, legislative decisions lack predictability.”

Ağbal emphasized that they have been working closely with TOBB and many other NGOs in order to improve the investment environment and said, “What can we do to improve commerce, investment, production and export? How can we reduce costs for businesses? How can we improve their competitive power? There are in-depth efforts to address these issues. We will be working together with the TOBB president at the Improvement of the Investment Environment Coordination Council to make important decisions.”