Good news for many debtors: a draft law announced by AK Party Parliamentary Group Deputy Chairman Mustafa Elitaş has been submitted to the Parliament. This proposal, consisting of 24 articles, aims to restructure and resolve citizens’ public debts. The broader scope of the regulation is designed to relieve not only individual debtors but also businesses facing financial burdens.
48-Month Repayment Option
The proposed restructuring extends repayment terms compared with previous measures. The maximum term has been set at 48 months, that is, four years. Eligible individuals and businesses would be able to divide their debts into 48 installments and pay over four years. Additionally, payments arising from tax base increases and voluntary tax declarations can be spread over 12 equal installments.
What Happens If Payments Are Missed?
The final application date for the restructuring program is set as April 30, 2023. Authorities allowed a lengthy application period to enable debtors to apply comfortably. Still, one common question is what consequences follow if installments are not paid.
Under the new draft, the allowable number of missed installments before cancellation increases: previously debtors were permitted to miss two installments, and now this threshold is raised to three. However, the requirement to pay the first two installments on time remains in force. If missed installments are subsequently paid, the restructuring remains valid and continues without being annulled.
Are Fines Included in the Restructuring?
While earlier arrangements often excluded fines, the new proposal broadens the scope to include administrative fines. This encompasses administrative penalties arising under laws such as the Tobacco Products Harm Prevention and Control Law, meaning such fines would be eligible for restructuring under the draft.
Attention: Debts Under 2,000 TL
According to the proposed law, outstanding debts and associated penalties, delay interest and accrued interest that were due before December 31, 2022 and remain unpaid as of January 1, 2023, with a total amount of 2,000 Turkish Lira or less, are planned to be written off.
What Is the Restructuring Interest Rate?
One frequent question concerns the interest rate applied under the new restructuring. According to the draft, the rate will be based on the Producer Price Index (Yİ-ÜFE) determined on January 1, 2016, calculated at a monthly rate of 0.75%. This corresponds to an annual rate of approximately 9%.