Türkiye has declared 2026 the “year of reforms,” stated Türkiye’s Treasury and Finance Minister Mehmet Simsek, who outlined a comprehensive structural reform agenda focused on industrial transformation, moving up the value chain, green and digital transitions, productivity investments, and enhancing infrastructure such as railways.
Speaking at the Powerhouse for Investment in the Türkiye Century press conference in Ankara on Monday, Simsek detailed the reform package announced last week by President Recep Tayyip Erdogan.
Simsek explained that the new investment framework aims to boost exports of goods and services, encourage asset repatriation, incentivise domestic investors to base their activities in Türkiye, and position the Istanbul Finance Centre as a key regional hub.
He noted that the first initiative introduces a 100 percent corporate income tax exemption on transit trade for companies based in the Istanbul Financial Centre, adding that companies operating outside of designated financial sectors will receive a 95 percent tax exemption on transit trade.
Simsek highlighted that the government aims to establish a competitive merchanting similar to those in Asia, citing Singapore, Hong Kong, and the Maldives, while leveraging Türkiye’s strategic geographical position along the Middle Corridor to capture key trade routes.
He noted that the government’s previously provided 50 percent tax exemption when the Istanbul Finance Centre regulation passed in 2009, has now been expanded to 100 percent.
The minister added that Türkiye already serves as a major energy hub and hosts a leading global commodity trader, prompting efforts to create similar companies locally.
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Radical steps
Simsek announced a second initiative aimed at boosting goods exports by sharply reducing the standard 25 percent corporate tax rate for exporters in an effort to increase competitiveness.
Manufacturer exporters will now benefit from a single-digit corporate tax rate of 9 percent, he stated, adding that this radical step targets foreign direct manufacturing investment, particularly because the outsourcing trends of the 1990’s no longer apply.
The minister pointed out that Türkiye’s manufacturing value-added rate relative to gross domestic product stands on par with that of the Asian tigers.
Simsek said the industrial transformation aims to move the country’s manufacturing up the value chain from medium-low technology to medium and high-tech production.
The government has also expanded the tax exemption for service exports to 100 percent in an effort to capture a larger market share.
Simsek explained that this measure targets high-value services such as software, video gaming, medical tourism, education, engineering, design, and architecture.
The minister emphasised that the services sector remains resilient to global trade protectionism and fragmentation, noting that Türkiye already boasts a strong global position with a service export surplus exceeding $60 billion.
Simsek highlighted that Türkiye offers a large domestic market with a GDP of $1.6 trillion last year, surpassing the combined $1.3 trillion economy of its eight neighbouring countries.
The minister noted that Türkiye’s GDP soared from an index of 100 in 2002 to 328, outperforming the emerging market average of 314.
