ECONOMY

IMF insists Turkey must raise taxes

ANKARA (Reuters) – The International Monetary Fund (IMF) wants Turkey to raise extra revenues to cover above-inflation increases in pensions and the minimum wage, Turkish economy officials said yesterday. The government recently said it was raising the minimum wage by 34 percent and state pensions by 21 percent this year. The government’s year-end inflation target is 12 percent. IMF inspectors who are in Turkey for a latest review of a multibillion loan pact say the government must come up with 3,000 trillion lira (some $2.2 billion) in extra revenues, primarily through tax hikes, the officials told Reuters. The government has so far resisted the IMF’s call to increase taxes, they said. The wage and pension increases are seen posing a 3,500 trillion lira burden on the budget, despite Turkey’s pledges to the IMF to stick to strict budgetary constraints. Previously, top economy officials have said the money will be raised through spending cuts.