Union of Chambers and Commodity Exchanges of Turkey

The July ordinary meeting of the İstanbul Chamber of Industry (İSO) Council was held at Odakule Fazıl Zobu Council Hall with the main agenda of “The Role, Importance and Expectations of TOBB, Our Umbrella Organization, in Solving the Problems of Our Industry and Production Life.”

The meeting was attended by TOBB President M. Rifat Hisarcıklıoğlu, İSO Chairman Erdal Bahçıvan and members of the Council.

Speaking at the meeting, Hisarcıklıoğlu said that the share of industry in national income reached 27 percent, the highest level in the last 20 years.

Stating that the number of OIZs, which is an indicator of the development in industrial investments, has increased from 191 to 393 in the last 20 years, Hisarcıklıoğlu said, “We have no province left without an OIZ. Again, the annual exports of the manufacturing industry broke a record by exceeding 240 billion dollars. Perhaps the biggest share in all these achievements belongs to you. Again with your efforts, our İstanbul Chamber of Industry is expanding its activities and institutional capacity every year. It brings new horizons and opportunities to our industrialists by conducting comprehensive studies in many fields from innovation to the environment, from technology to university-industry cooperation. It supports the development and growth of our SMEs. All this is a modern service understanding befitting the leading city of industry.”

Stating that long-term investment financing opportunities should be increased, Hisarcıklıoğlu said, “The Central Bank's investment loans should be continued and even its capacity for technology projects should be increased. Because we need large-scale key technology investments to reduce our current account deficit and get a bigger share from global supply chains. We should redesign our incentive system accordingly. We believe that if we bring at least 5 civil technology investments similar to Togg to our country, we will make a great breakthrough in technology.”

- “We will start exporting in Togg next year and carry our flag to world markets”

Hisarcıklıoğlu reminded that they launched the Türkiye's Automobile project 6 years ago and said, “While no one else came forward, we brought together 5 patriots and set out. For the first time in our history, we produced the automobile whose intellectual property rights belong entirely to our country. We realized our 60-year dream of a domestic and national automobile. With Togg, we not only produced automobiles, but we are also pioneering the new mobility ecosystem transformed by electric, smart and autonomous technologies. Domestic sales of Togg, which started in March, attracted more than 6 times more demand than production. This showed the trust and faith of our people. Next year, Allah willing, we will start exporting and carry our flag to world markets. This dream was all of ours, and we will be proud to realize it together.”

Pointing out that the business world wants predictability and expects a road map for the future, Hisarcıklıoğlu said: “In order to make business plans, to see what lies ahead and thus to move forward with confidence, it is important that the medium and long-term plans for the economy are shared with the public by the public. In this context, last week we met with Mr. Cevdet Yılmaz, Vice President of the Republic of Türkiye, and conveyed our suggestions for the Medium Term Program, which is the road map of the economy and is expected to be announced in September. Of course, for our industry to survive and continue to grow, stability and confidence in the macroeconomy is a prerequisite. We welcomed the normalization steps initiated by the new economic management in monetary policy by acting in this direction.

The contraction in SME loans in particular has a negative chain effect on the entire country and sectors. This needs to be taken into consideration. Türkiye's priority should be to maintain its existing production capacity. Commercial loans should not be cut suddenly and drastically. The demands of the real sector for access to financing should not be viewed negatively in a wholesale manner. Yesterday, there was an important development in this context. The volume of rediscount credits and the share allocated to SMEs were increased and access conditions were eased. The 30 percent additional foreign currency sales requirement was abolished. We welcome all these simplification steps and hope that they will continue.”

- “The tax system needs reform”

Rifat Hisarcıklıoğlu pointed out that the tax system in Türkiye needs reform and said, “We have a very complex tax system. Moreover, we are making it more complicated every year. Because of a few bad examples of abuse, we are making life more difficult for millions of taxpayers. This is increasing the number of tax disputes. We need to change this approach. Unfortunately, our VAT system has also become a financing problem for the private sector. Non-deductible VAT should be refunded at the end of each year, the possibility of offsetting the accumulated and overdue VAT stock should be introduced, and the VAT refund process should be accelerated by adopting a simpler system. Income tax steps should be reorganized taking into account past inflation.”

- İSO President Erdal Bahçıvan

İSO President Erdal Bahçıvan stated that in an environment where contradictions between the objectives of growth, price stability and financial stability have increased and room for maneuver has narrowed, monetary policy errors and systemic financial fluctuations stand out as the main risks, and the increase in global interest rates has increased the pressure on all economies.

Stating that domestic savings in Türkiye are insufficient to finance growth, Bahçıvan made the following assessments: “It is more important than ever for international capital inflows to have a permanent and healthy structure, especially to increase the share of direct qualified investments in financing. In this context, the agreements reached for investment, trade and foreign financing in many areas such as defense industry, technology, renewable energy within the scope of official visits to Gulf countries in recent days are promising for our country.

The compromise on Sweden's accession to NATO is also valuable as it signals a normalization in our country's foreign relations. With the support of this positive climate, it is our greatest hope that the problems we face with the EU, especially the updating of the Customs Union, will be resolved. I would like to remind again that urgent steps should be taken to ease the visa problem, which has recently become one of the most serious obstacles for our business people.”