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(ECO) INFORMALITY IS AN UNSUSTAINABLE BURDEN FOR TURKISH ECONOMY, FINANCE MINISTER SIMSEK.

ANKARA, Apr 20, 2010 (TUR) -- Turkish Finance Minister Mehmet Simsek said informality in economy has turned into an unsustainable burden for Turkey.

Simsek who spoke at a press conference in Ankara Tuesday, during which a World Bank report on Turkey titled "Informality: Causes, Consequences, Policies" was made public, said informal economy in Turkey was the greatest obstacle before development.

Simsek pointed out that informality started being accepted as a natural element of Turkish economy.

He said fight with this phenomenon which also had a negative impact on efficiency, was not an easy task, adding that it required a series of long term measures, social consensus and a multi dimensional approach.

"Informality effects a wide range of areas including institutionalization, copy rights, social ethics, and economic growth. It leads to unjust competition and disrupts income justice," said Simsek.

He said the argument that high tax rates in Turkey was the leading cause of informality was not true. He said Turkey ranked 29th among 30 OECD countries in tax burden.

Commenting on the effects of informality over employment, Simsek said they lowered the tax load over employment since 2002, adding that it should be further lowered.

"In this country there is an unemployment fund. At the same time there is severance pay. This seriously impedes flexibility. One of the biggest obstacles before Turkey is the high rate and heavy burden of severance pay," said Simsek who emphasized the need for flexibility in the work force market for creation of jobs.

Simsek said these were not enough alone underlining the need for a more active administration and auditing.

He said 10 different state institutions prepared "the Plan of Action for Fight with Informality", adding that cooperation between institutions were required for this fight.

Simsek said the Finance Ministry alone could not fight with informality urging all segments to extend support.

(THROUGH ASIA PULSE)
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Publication:Anadolu (Eskisehir, Turkey)
Date:Apr 20, 2010
Words:310
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