ISTANBUL Feb 14 Turkey will offer tax breaks of
up to 60 percent and incentives including deductions on employee
costs for investment in its automotive sector under an extended
investment promotion scheme, a senior industry official said on
Turkey's automotive industry, a key export sector, was hit
hard by a weak domestic market and shrinking export demand from
debt-choked Europe last year, when sales fell 10 percent to
818,000 units and exports dropped 8 percent.
The investment scheme, an extension of a programme launched
by the government last year, is expected to be announced on
Friday. Government officials declined to comment.
Manufacturers in Turkey including Ford Otosan,
Oyak Renault, Tofas, Hyundai
and Toyota could all benefit from the government
scheme, the source who is familiar with the plans said.
Eligible projects will include motor vehicle investments of
more than 300 million lira ($170 million), engine investments of
more than 75 million lira and spare parts projects of more than
20 million lira.
The government divides Turkey's 81 provinces into six bands
along criteria including their contribution to national output
and per capita income. The incentive scheme aims partly to boost
investment in the country's less developed regions.
Incentives in the lowest bands under the scheme will include
VAT and customs rebates, employee cost contributions and
subsidies on land purchases, the source said.
($1 = 1.7635 Turkish liras)
(Reporting by Evrim Ballim and Birsen Altayli; Writing by Daren
Butler; Editing by Nick Tattersall)