Rents for homes and businesses to be paid based on a fixed exchange rate with foreign currencies - Part of measures announced by TRNC government
According to Bayrak, the 23 measures presented by ‘prime minister’ Tufan Erhurman to ‘parliament’ include lowering VAT rates on basic foods, fixing foreign exchange rates for rents, switching to multiple electricity tariffs, discounting property transfer fees and providing incentives to local producers.
Implementation was to be swift, the report said, with the measures to be put in place this week.
Turkish Cypriots have seen their purchasing power diminish dramatically in recent weeks as the spat between Ankara and Washington escalated and the fall in the lira rattled global markets.
The situation was equally bleak for estate agents, who are reeling after rents – which were already sluggish – shot up by 300TL since last week, while many traders said they were in facing an unprecedented situation.
An electronics salesman said there had been a 20 per cent increase in the price of mobile phone units in the space of 48 hours at the start of the week.
We cannot replace the merchandise we sell, said Fuat Cirik, speaking to Yeni Duzen. In one single hour the price of phones went up by 50TL.
Computer salesman Ercan Acim added:
As a result of the rate, our business has been reduced to nothing, computer prices rose 800TL compared to last week, and we do not have the funds to replace them once sold.
Jeweller Ecme Avci said sales of gold had plummeted, as people had started to sell rather than buy.
In some cases, depositors requested large transfers from their local bank accounts. For a while, rumours circulated that a 5,000TL limit had been slapped on withdrawals, but the ‘Central Bank’ brushed off the claim.
Former ‘minister of finance’ Zeran Mungan said he was concerned of possible hikes in fuel and energy prices, which would both directly influence the consumer price index.
It was hoped on Tuesday the 23 measures announced would help ease the pain on Turkish Cypriots who have seen their wages go into freefall this month. The aim of the plan is to restore at least some of their purchasing power.
Also under the measures, rents for homes and businesses would be paid based on a fixed exchange rate with foreign currencies, while exchange rates would also be fixed for private-school fees.
Tax applied to rents in foreign currency would also be reduced from 13 per cent to 1 per cent in lieu of fixing the exchange rate
Higher taxes would be imposed on casinos and betting shops for six months, while VAT would be reduced on household products and basic foodstuffs. VAT would also be cut to 5 per cent in restaurants while incentives would be introduced for hotels to meet their needs from local and domestic producers, and for hiring local staff.
Electricity prices would become multiple-tariff with lower rates applying at certain times of the day.
To avoid new increases in fuel, there would be hikes in alcohol and cigarette prices. A new tax of 5 per cent on wages would be applied to foreign workers with a work permit who bring their children with them, reports said.
Meanwhile, Turkish Cypriot ‘finance minister’ Serdar Denktash called on people to economise as much as possible as he arrived at ‘parliament’ on a bicycle, saying he had been using it for the past five days.
Denktash said the crisis could not be solved with ‘government’ decisions without action being taken to save money even in ‘state’ buildings such as shutting down air conditioners. These kinds of savings should be made in all homes.
This is an extraordinary situation. We are being affected by events that do not involve us, he said.
Denktash also said the demand for a change to the euro in the north that had been circulating in recent weeks was not feasible.
Copied and edited from Cyprus Mail
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