Turkey expects to collect $5.32 billion in debt restructuring before elections

Turkey expects to collect $5.32 billion in debt restructuring before elections

ANKARA (Reuters) – Turkeys government is expecting some 100 billion lira ($5.32 billion) in payment as part of a restructuring of public debt worth 1 trillion lira under a draft law, an impact analysis report submitted to a parliamentary commission showed.

The restructuring package will allow individuals and companies to catch up with unpaid tax and social security debt, in a move seen to gather support for for Turkish President Tayyip Erdogan ahead of tight elections to be held in May.

The analysis showed tax offices will be able to collect 43.5 billion lira from some 521 billion lira receivable, while the social security institution is expected to collect 47.8 billion lira from 196 billion lira outstanding as part of the law.

The draft law includes scrapping public debt below 2,000 liras, meaning the public institutions will give up collecting some 4.6 billion lira, according to the analysis.

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

Last week, Erdogan announced the planned draft and said it will enable restructuring of debt to tax offices, customs offices, municipalities.

($1 = 18.8079 liras)

(Reporting by Nevzat Devranoglu; Editing by Arun Koyyur)

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