Turkey's proposed tax reforms should somewhat increase foreign currency inflows and medium-term investment in manufacturing and export-oriented sectors amid economic pressures from the Iran war. Still, continued high inflation, political uncertainty and bureaucratic hurdles will likely limit the reforms' overall effectiveness ahead of the 2028 presidential election. On May 5, Turkey's ruling Justice and Development Party, or AKP, submitted a bill to Turkey's Grand National Assembly intended to increase foreign currency inflows and boost both foreign and domestic investment through a series of economic reforms, including tax exemptions and tax cuts. Some provisions include 20 years of income tax exemptions for non-Turkish residents who transfer foreign-earned assets into the country. These income tax exemptions would also extend to recent residents of Turkey who have not paid domestic income taxes over the past three years and who register their foreign assets by July 2027. The tax breaks also extend to corporations...
