The condition of payment for the deduction of the tax accrued in the VAT-2 Declaration, which must be submitted according to the Value Added Tax Law No. 3065, put into practice with Law No. 7491, has stalled transactions, especially in the iron and steel sector. Firms have suspended their purchase and sale transactions awaiting the decision.
Eyüp Gümüş, CEO of Gümüşhan Demir Çelik, who spoke to SteelRadar about the topic, commented, "The system will be locked and the sector will be in serious trouble. Even if this mistake is reversed in the future, it will by no means be easy to recover the scattered system. None of the traders who manage this sector are currently buying and selling. We are stuck in supply inside. We want the authorities to see this situation. It is thought that there is a profit because there is a very serious turnover in iron, but there is no such profit."
"Most companies are on standstill"
Gümüş made the following evaluations on how the VAT application with reservation affects the taxpayers and the sector: " If the authorities hear our voice and respond to it, the end user may be able to make early and fast payments, but the intermediaries need to be settled like the old system. No one in the market says that they cannot handle it and that work will stop. Most of the companies have already stopped. There is an involuntary shipment due to the promises and agreements made before the New Year, but this is not even 10% of the previous shipments. There are no sales in new connections. Even when we ask for payment, it doesn't go to sales. Everyone is in a waiting mode right now. Shipment and circulation have completely stopped. This is the case in all three regions of Istanbul, Izmir and Payas. The volume has dropped to 10% in each region. If it is finalized, this situation will drop to 1%."
Gümüş stated that the difficulties in the sector not only affect the economy, but also the production processes and supply chain, and said, "If we want to integrate the end-user into production, it should not work with this system. The factory cannot handle it. TOKİs, which are currently carrying the sector due to the earthquake, will have a big problem due to this situation. This will cause major problems in the sector," he added.
All are looking forward to trading
Mentioning that there was also an uneasiness about IDIS, Gümüş pointed out that there was an uneasiness and restlessness about IDIS, but everyone saw how great IDIS was. When IDIS comes, it will be even more beautiful in the system and trade. However, it is a situation where returning to VAT 2 is not accepted by anyone. In this inflation, no one is waiting for this in this market. Everyone is waiting to trade. No one can trade out of fear. No one is resentful of this sector. We have spent years in this sector and no one wants to go back after this time. It especially affects the Iskenderun region in many ways."
"If this is approved, the sector will completely end"
Ayes Wire Mesh Trade Manager Ö. Erdoğan Çelik highlighted that the troubles negatively affected the traders and factories in the sector and added, "The market is stuck. Everyone is objecting to this situation regarding big factories. The VAT issue has slowed down their business in an abnormal way. The communiqué is not completely definite, it may change as it is currently in the draft stage. But traders and factories are very worried, it has affected their business very much. If it is approved, the sector will be completely finished. The traders who are financially weak will be completely finished. Because they will pay the VAT in advance, make that payment and will not get what they will get. People will be in a difficult situation, but strong companies will continue. This has a cost in its reflection on iron. In the published Communiqué, article 4 says that we will take the debt arising from the declaration on the 21st of January. If this happens and is finalized, this will create a huge problem for the market," he explained.
"The contractors will be the main victims"
Meanwhile, Ayata Demir Çelik Founder Süleyman Ayata stated, "I think that as a result of this, those who do unregistered work will get out of this business. After a few months, factories will not be able to meet the demands of contractors individually. The trader has iron in a few places and meets the needs of construction sites. If the trader goes out of business, access to commodities will be a problem. The contractor will be the most victimized in the first place. Traders will also suffer financially. This is not a fair situation. For example, if a product leaves the factory and changes hands through four different traders, it means that the VAT on this product is being blocked 4 times. This means that the trader finances the state for at least a month and this amount of money is withdrawn from the market and retained. Of course, there are those who say that this situation will change. Those with little power will not want to do it. Some will withdraw from the market and some will turn completely illegal. The trader is not entering additional stocks right now. That is why the market is very stagnant, everyone is waiting for the result."
Authorities are expected to step in to resolve these ongoing problems as soon as possible and prevent the victimization of all shareholders in the sector. Industry representatives emphasize that a clear and positive decision on this issue is critical for the sustainability of the iron and steel industry.
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