PAGDER/Benliler: One Machine's Worth of Tax is Paid for Every Five Machines

Foreks - Kenan Benliler, Chairman of the Turkish Plastic Industrialists Association (PAGDER), stated, "A tax equivalent to the value of one machine is paid for every five machines. During this period of rising financing costs, our government can accelerate investments by reducing the tax burden on investment costs."

Tax for Every Five Machines Benliler emphasized that changes are needed in the investment incentive system to encourage investment in the plastic sector, stating, "Due to the inclusion of plastic injection machines, which are extensively used in our industry, in the list of machines and equipment that cannot benefit from customs duty exemptions, sector investments are effectively outside the scope of incentives. As a result, a tax equivalent to the value of one machine is paid for every five machines imported for investment purposes. During this period of rising financing costs, our government can accelerate investments by reducing the tax burden on investment costs."

Investments are Rapidly Decreasing Benlilers pointed out that in previous years, plastic injection machines could benefit from customs duty exemptions. "Until recently, investors who had received investment incentive certificates prior to the changes continued to benefit from customs duty exemptions. However, we are observing a slowdown in investments in the plastic sector due to the inability to benefit from this exemption with the new certificates. In the first eight months of the year, imports of plastic injection machines have contracted by 20%. One of the main reasons for this is the tax burden on the import of injection machines. Currently, for every five machines imported, a tax equivalent to the value of one machine is paid. Investors, already facing high financing costs, are either abandoning their investment decisions or narrowing the scope of their investments due to these high investment costs exacerbated by taxes. If this contraction in investment appetite continues in our sector, we risk losing our competitive edge in the medium term. Particularly, if our competitors in export markets do not slow down their investments, it could lead our country to fall behind not only in production capacity but also in production capability and efficiency. Due to advancements in machine technology, energy efficiency and production consistency of machines are rapidly improving. In order to maintain our competitive edge during this process, we need to not only avoid slowing down but also eliminate such thoughts from our minds," he added.

Insufficient Production in Our Country Benliler highlighted the limited production of plastic injection machines in Turkey, stating, "Our industry is forced to meet the demand for injection machines through imports, as our domestic machine manufacturers cannot fulfill the capacity requirements. Therefore, the exclusion of plastic injection machines from customs duty exemptions does not provide significant benefits to domestic machine manufacturers, nor does it facilitate the investment plans of domestic plastic product manufacturers. Additionally, unlike final products, the effects of such increases on the costs of investment goods are much broader, accelerating inflation. Thus, by considering the interests of the entire manufacturing industry, removing plastic injection machines from the list of machines and equipment that cannot benefit from customs duty exemptions will contribute to the healthy development of our economy," he concluded.