Salary increase bill approved in the Turkish Grand National Assembly

The "Bill Proposal on the Establishment of Additional Motor Vehicles Tax for Compensation of Economic Losses Caused by the Earthquakes on February 6, 2023 and the Amendment of Certain Laws and the Decree Law No. 375", which includes regulations for increasing the lowest civil servant salary to 22,017 liras, a 25 percent increase in retirement salaries, and foresees some tax increases, was accepted in the General Assembly of the Turkish Grand National Assembly. According to the law, a one-time additional Motor Vehicles Tax (MVT) will be applied in order to meet the financing need that emerged in order to reduce the effects of the earthquakes centered in Kahramanmaraş on February 6. All vehicles, including automobiles, buses, trucks, vans, airplanes, and helicopters that are registered and recorded on the date of the publication of the regulation and all vehicles that will be registered and recorded by December 31, 2023, will be within the scope of the additional MVT. The additional MTV will be equal to the MTV amount accrued for 2023. The additional MTV will be accrued in two equal installments. The first installment of the additional MTV will be paid by the end of the month following the publication of the regulation. The first installment of the additional MTV will be paid by the end of August; the second installment will have to be paid by the end of November. The additional MTV for vehicles that will be registered and recorded for the first time between the date of publication of the law and December 31, 2023 will be paid in advance together with the MTV of these vehicles. The additional MTV will be applied once and will be recorded as general budget revenue. In places where a "force majeure event" was declared by the Ministry of Treasury and Finance within the scope of the Tax Procedure Law due to the earthquakes centered in Kahramanmaraş; vehicles registered and recorded as of the date of the earthquake, vehicles belonging to the owners of buildings that collapsed or suffered severe or moderate damage due to the earthquake, vehicles that became unusable due to severe damage in earthquakes, and vehicles belonging to taxpayers who lost their spouses or first-degree blood relatives due to the earthquake will be exempt from the additional MTV. Retirement Fund, Bağ-Kur and SSK retirees will receive a total of 25 percent increase, including the inflation difference, for 6 months of the year. The regulation will enter into force on the date of publication to be implemented as of July. Facilitation of entitlement transactions via e-Government The law added a temporary article to the Law on Measures to be Taken and Aid to be Provided Due to Disasters Affecting Public Life. Accordingly, the announcement regarding the entitlement application of those who want to grant construction loans or have buildings constructed in places accepted as disaster areas affecting public life due to the earthquakes that occurred on February 6 will be announced by the local provincial administration and on the official website of the Disaster and Emergency Management Presidency. The regulation will enter into force on the date of its publication, effective as of July 13, 2023. The announcement states that applications can be made within 2 months from the date of announcement, in writing to the local provincial administrations or to the application centers determined by the Disaster and Emergency Management Presidency or via the e-Government Gateway. The Disaster and Emergency Management Presidency may grant an additional period of up to 1 month for applications when necessary. The application results will be announced by the local provincial administration, on the official website of the Disaster and Emergency Management Presidency and via the e-Government Gateway. Those who are not accepted as beneficiaries can object within 15 days to the local provincial administrations or to the application centers determined by the Disaster and Emergency Management Presidency in writing or via the e-Government Gateway. In addition, exemptions from certain restrictive provisions will be provided in the works and transactions to be carried out regarding the obligations of the state to open housing loans and construct buildings for those whose buildings are damaged in earthquakes, in order to eliminate possible grievances, to extend an equal helping hand to disaster victims and to ensure unity of implementation. The works and transactions related to the implementation of projects to be financed with foreign loans and grants to be provided by international organizations will be exempt from all kinds of taxes, duties, participation shares, fees and charges. Materials imported or had imported by the Disaster and Emergency Management Presidency within the scope of national and international projects will be exempt from customs duties and all kinds of taxes, duties, fees, funds and other financial obligations collected together with this tax. It has been regulated that the education periods of military students educated in foreign state war schools can be determined on a year and term basis according to the status of the school to which they will be sent, that students can be sent to foreign state war schools for certain periods rather than until graduation, that more students can be sent to foreign state war schools on a part-time basis with the budget to be allocated for a student educated in foreign state war schools, and that military students can also be sent to war schools of certain countries that are not equivalent in terms of education periods and to which students cannot be sent. In addition, a regulation was made regarding the determination and collection of the expenses incurred by the state in the event that students who will be educated part-time leave the Turkish Armed Forces, and that the share and classification of students who will be educated part-time will be subject to the same procedures as military students who will graduate from foreign state war schools. Resources may be transferred from the revolving fund budget to the general budget with the approval of the Minister of Culture and Tourism for the purpose of reviving or reconstructing movable or immovable cultural assets that are damaged due to earthquakes, floods, landslides, avalanches, fires and similar natural disasters within the scope of the Law on the Protection of Cultural and Natural Assets. The President will be authorized to increase the amount of the recycling participation fee applied to the products on the list, which also includes plastic bags, by up to two times or reduce it by up to half. The VAT exemption application will continue in the transfers and deliveries realized through the sale of immovable properties that have been in the assets of institutions for at least 2 full years. In places accepted as disaster areas affecting general life due to earthquakes, deliveries and services made to professional organizations qualified as public institutions due to the construction of houses to be donated to disaster victims within the scope of the protocol signed with the Disaster and Emergency Management Presidency will be exempt from value added tax until December 31, 2024. Taxes incurred due to deliveries and services made within this scope will be deducted from the tax calculated on taxable transactions. Taxes that cannot be compensated through deduction will be refunded upon the request of the taxpayer performing transactions within the scope of the exemption. The President will be authorized to extend the period up to one year, and the Ministry of Treasury and Finance will be authorized to define deliveries and services that will be within the scope of the exemption and to determine the procedures and principles regarding exemption and refund. "To be registered in the name of the Treasury in the land registry" All work and transactions that must be carried out with the consent of all owners before the new applications and relevant administrations/institutions and organizations will be carried out based on the decision to be taken by the absolute majority of the owners in proportion to their shares. The shares of the owners who cannot be reached due to reasons such as not being able to reach an agreement, being deceased and not being able to reach their heirs, being abroad, or not being able to know where they are, will be temporarily registered in the name of the Treasury at the land registry until the construction work is completed and registered under the name of the owners. Considering the aids provided within the scope of the Law on Measures to be Taken and Aid to be Provided Due to Disasters Affecting Public Life, the owners will be given a grant for a house and a workplace and a construction loan upon request. The Treasury will cover the construction cost of the shares registered under the name of the Treasury due to not being able to reach an agreement or not being able to reach the owner. If the construction work of the new building has not started within one year due to reasons originating from the contractor or the construction work has been stopped at a certain level and the construction activities have not been continued with the team and equipment at a level that will require the completion of the project for at least six months, a decision can be made by the absolute majority of the owners in proportion to their shares to terminate the contracts. A payment of 8 thousand 77 liras will be made in one go An additional payment (8077 TL) will be made to all public personnel in the amount found by multiplying the indicator number 15 thousand 965 by the civil servant monthly coefficient. In earning the right to additional payment and making this payment, the provisions to which the personnel are subject regarding monthly or wages will be applied. This payment will not be subject to any tax or insurance premium deduction except for stamp duty. It will be paid to those within the scope of additional payment based only on their own title and will not be included in the scope or calculation of payment elements that are the basis for determining their financial rights in accordance with other legislation, in terms of those whose financial rights are determined by taking the highest civil servant or another title as basis or precedent in accordance with the legislation. This payment will not be taken into account in the calculation of monthly, wage, raise, compensation, allowance, revolving fund payment, bonus and any other payment element that is being paid in accordance with the relevant legislation or is taken as the basis for determining financial and social rights. The President will be authorized to eliminate any hesitations that may arise in the implementation of the article and to direct the implementation. The article will enter into force on the date of its publication to be implemented as of July 15. With the amendment made to this article during the negotiations, a technical regulation was made regarding the application principle of the additional payment in order to avoid hesitation for those with other statuses who receive their salaries according to the Turkish Armed Forces Personnel Law. The President will be authorized to add the necessary appropriation to meet the appropriation need arising from the 30 percent increase made in the financial and social rights of civil servants and other public servants in January and the increases to be made in July, and the 45 percent increase made to workers in January and 15 percent in July within the scope of the 2023 Public Collective Labor Agreements Framework Agreement Protocol. The President will be authorized to add the appropriation needed for the salaries to be paid to those who are granted retirement or old-age pensions, retirement bonuses, holiday bonuses and additional payments; the increase of the holiday bonus to 2 thousand liras; the increase of the lowest retirement pension to 7 thousand 500 Turkish liras, the state contribution of the minimum wage increase, employer premium incentives and health premium payments of those who cannot afford to pay, and additional payments to be made to the relevant administration budgets. As of the first business day following the entry into force of the law, the supports provided by the resources of the Ministry of Treasury and Finance will be provided by the resources of the Central Bank. The areas to be established in forest-qualified areas and olive groves and olive fields for the purpose of meeting the housing needs of earthquake victims have been limited with a sketch. As of the effective date of the article, in villages and rural areas where the site selection has not yet been completed, in cases of necessity and in case there is no other area, forest-qualified areas in the provinces can be used up to a maximum of one thousand square meters per rightful owner. Forest-qualified areas, olive groves and olive grove fields will only be used for the needs of disaster victims and will be registered according to their previous characteristics within 1 year at the latest following the finalization of the zoning plans of the real estates in the phase of need. A new article has also been added to the law. According to the regulation made in order to meet the need for sub-branch specialists in Turkey, physicians will be able to take assistant exams and start specialization training in order to receive specialization training before starting or completing their state service obligations. In order to start training in a minor branch or more than one specialization branch, at least half of the civil service obligation period will be completed. The law clarified the salary and compensation indicators to be paid to ambassadors working in the central organization of the Ministry of Foreign Affairs. Following the vote, the bill, which envisages increasing the lowest civil servant salary to 22,017 liras, increasing retirement salaries by 25 percent, and increasing certain taxes, was accepted by the TBMM General Assembly and became law.