Prime Minister Ersin Tatar announced on Wednesday evening the government’s economic measures and support package to deal with the impact of the coronavirus pandemic on the TRNC economy.
Announcing the 33-point austerity package at a press conference at the Prime Ministry, Tatar said that the measures adopted will create 1.5bn Turkish Lira in revenues needed to mitigate the economic impact of the crisis.
Tatar, summariSing the various measures in place, said that all the decisions adopted by the government were aimed at ensuring the health of the public.
“The measures we have adopted are aimed at this. Of course, these measures will have economic consequences. That is economic activity has been severely restricted,” he said.
According to the measures, all public-sector salaries above 5,000 TL will be slashed by 25 per cent for a period of three months.
No cuts will be made to salaries lower that 5,000TL
Those who receive a salary of 6,000TL and lower will have a 16 per cent cut.
He added that the highest public-sector salary will not exceed 8,500 TL and that the Prime Minister, ministers, MPs and other high ranking public servants will take cuts up to 56 per cent.
The salaries of public servants who have been carrying out essential services will not be touched, the Prime Minister said.
A fund will also be created from 100m TL resources to be obtained by banks.
The cost-of-living raise given to public servants twice a year will also be frozen from March 2020 to June 2020.
Other austerity measures will include cutting down on overtime payments and other extra expenditures.
All state contributions made to public institutions, municipalities and political parties will also be slashed by 25 per cent on the condition to be paid at a future date.
Tatar said that the government will be allocating 750m TL to support the real sector.
Businesses which close their establishments as part of measures to contain the spread of the coronavirus, should they be unable to pay their due rent, will be given the option to postpone payments to June and to pay their overdue rent in instalments within six months.
Special loan and donation schemes will be made available for farmers and animal breeders inorder to address any problems which may arise in production.
The state will cover the interest charged for bank loans of businesses which shut shop due to the outbreak and which will apply to postpone their instalment payments.
Legal arrangements will also be made to allow banks to raise credit card limits of customers by 25 per cent without requiring proof of income.
Moreover, customers will be able to postpone payment of their credit card bills used between March 26, 2020, and April 26, 2020, to purchase food and fuel or cover health expenses for a month without being charged any interest.
The state will also be paying all TRNC and Turkish citizen employees of private establishments closed as part of coronavirus pandemic, a salary contribution of 1,500TL through the Employment Support Fund to ensure that the businesses continue to operate without having to lay-off employees.
Taxes levied on tobacco products and alcoholic beverages will also be raised.
Withholding tax on interest on Turkish Lira income will also be raised to 15 per cent.
Other measures include postponing the payment of social security deposits, provident fund payments, creating development schemes and state contribution payments to various sectors.