Turkey preps draft law for debt restructuring before elections

Turkey’s ruling AK Party is preparing a draft law to let people and companies restructure debt to public institutions, President Tayyip Erdogan said on Monday, one of a string of eye-catching measures promised ahead of elections.

The changes would waive late payment fees incurred over unpaid tax bills, social security debt and other liabilities, Erdogan said after a cabinet meeting.

It would also let individuals and companies pay outstanding debts in instalments after restructuring with a certain rate, he added.

“We are preparing a draft law that will restructure public receivables of institutions such as tax offices, customs offices, social security institution, municipalities,” Erdogan said.

The announcement come as President Erdogan faces what is seen as the biggest challenge to his 20-year rule in parliamentary and presidential elections expected to be held on May 14.

The government has already ramped up spending, including dropping a retirement age requirement for millions and substantial hikes to minimum wage and pensions.

Further details will be announced by the treasury and finance ministry, Erdogan said.

Last week, Turkish broadcaster NTV and other media reported that the government is planning to offer a wide-ranging restructuring package to citizens.