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December 21, 2023

“Economic Stability Shield” on Reducing the Effects of the COVID-19 Outbreak

President Recep Tayyip Erdoğan announced a package of 19 items called “Economic Stability Shield” to reduce the effects of the COVID-19 outbreak on 18.03.2020.

1- Concise and VAT withholding and SSI premiums for Retail, AVM, Iron-Steel, Automotive, Logistics-Transportation, Cinema-Theater, Accommodation, Food-Beverage, Textile-Garment and Event-Organization sectors were delayed for 6 months.

2- The accommodation tax will not be applied until November.

3- The easement rights and revenue share payments related to hotel rentals were postponed for 6 months for April, May and June.

4- In domestic air transportation, the VAT rate has been reduced from 18 percent to 1 percent for 3 months.

5- As the KOVİD-19 outbreak is affected by the measures related to the outbreak, the companies’ cash principal and interest payments to banks will be postponed for a minimum of 3 months and additional financial support will be provided if necessary.

6- In order to maintain capacity utilization rates in exports, inventory financing support will be provided to the exporter.

7- In this period, the credit debts of Halkbank to the tradesmen and artisans who demanded by declaring that their works were negatively affected; principal and interest payments for April, May and June will be postponed for 3 months with no interest.

8- The Credit Guarantee Fund limit was increased from 25 billion liras to 50 billion liras. Since the priority in loans is negatively affected by the developments, it will be given to companies that have liquidity needs and collateral deficits, and to SMEs.

9- It will be encouraged to put in place credit packages for social purposes under favorable and advantageous conditions for citizens.

10- In houses under 500 thousand liras, the credible amount will be increased from 80 percent to 90 percent. The minimum down payment will be reduced to 10 percent.

11- With the effect of the measures taken against the spreading of the virus, the firms registered in default in April, May and June will have a “force majeure” note on their credit registry.

12- Minimum wage support will be continued.

13- Flexible and remote working models in the legislation will be made more effective.

14- Short Work Allowance will be put in place, the processes required to benefit from this will be facilitated and accelerated. Thus, while providing temporary income support to workers at workplaces that suspend their activities, the cost of employers will also be reduced.

15- The lowest pension was raised to 1,500 liras.

16- Retirement bonus of retirees will be paid at the beginning of April. Again, pensioners’ salary promotion payments will be deposited directly into their accounts, without having to go to the branches.

17- An additional 2 billion lira resource will be allocated for financial aid to families in need according to the criteria set by the Ministry of Family, Labor and Social Policies.

18- In order to ensure continuity in employment, the 2-month compensatory working period was increased to 4 months.

19- Periodic follow-up program consisting of social and home health services will be put into operation for elderly people over 80 years old living alone.


Gülenay Kavcar

Gülenay Kavcar