By OZGE YAVUZ
The success ready-made clothing achieved in production has been losing blood in the retail part of the business in recent years. Foreign fashion and retail brands, which were eager to come to Turkey for a while, no longer have Turkey in their target market list. Those already engaged in the market are closing their shops and leaving. The reason for this is the taxes imposed on imports gradually over the last 10 years to protect the producer in the domestic market.
Some foreign retail brands operating in Turkey make payments in order to offer imported ready-made clothing, shoes and bag products for sale under various items like customs, additional customs duty, additional financial obligation, VAT, stamp duty, registration certificate, reference price application, test costs, warehouse costs, consultant and declaration costs, rent and employee costs. Registered (foreign) brands, which state that all these expenses are reflected in their cost at a rate of 53%, recently opened the tax issue to discussion. The reason is unfair competition that is alleged to occur in the market.
Low taxes in e-commerce
The speed of e-commerce triggered the re-emergence of the issue of high taxes on imports. When the consumer, who turns to e-commerce especially with the pandemic, buys foreign brand products over the internet, 18% fixed tax is applied for EU-origin products and 20% for the mails from other countries. Organized retailers that do this business as a trade, on the other hand, are complaining about an unfair competition environment in the market when they are subject to tax and additional financial liabilities exceeding 50%. Foreign brands, which prepared a report on this situation and submitted it to the Ministry of Commerce in the past few days, are waiting for a meeting date from Ankara.
Izzet Stamati, President of the Registered Trademark Association (TMD), said that the high taxes imposed on imported products in shoes, bags and ready-to-wear since 2011 have made it difficult for foreigners to stay in the market and has a negative impact on employment. “We have many topics in the report we submitted to the Ministry. First, it’s unfair competition. Secondly, our prices are higher than other countries due to taxes. We are now getting expensive even for tourists. On the other hand, brands end up leaving the Turkish market. The number of our members in the association has even decreased by half to 20. It is very difficult for a foreign brand to come to Turkey in a high tax environment,” he said.
Stating that retailing has become very difficult with imported branded products in Turkey, Stamati said, “Many brands have already exited Turkey for this reason. Forever New and Michael Kors were the last ones.” Tax per kilogram was applied in imports in the past, Stamati reminded, adding this method can be used again. He stated that the cost of taxes and additional financial obligations has reached 53%, and this rate should not exceed 25%.”
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