Exporters' Associations Demand Reduction in SGK Premiums
The Istanbul Ready-to-Wear and Apparel Exporters Association (İHKİB), Istanbul Textile and Raw Materials Exporters Association (İTHİB), Istanbul Leather and Leather Products Exporters Association (İDMİB), and Istanbul Carpet Exporters Association (İHİB) Presidents emphasized the need to increase the SGK premium reduction from 5% to 10% to prevent nearly 300,000 job losses across Turkey.
These associations, gathered under the umbrella of Istanbul Textile and Apparel Exporters Associations (İTKİB), stated that manufacturers and exporters should receive more support in the face of rising costs. The joint statement highlighted the need for a more equitable distribution of the burden arising from labor costs, especially in labor-intensive sectors. It was suggested that, under current conditions, not only the income tax brackets deducted from salaried employees should be updated, but also that the existing 5% premium reduction should be increased to 10% for a duration of two years. This request was stated to cover not only small and medium-sized enterprises (SMEs) but all companies operating within the sectors.
Significant decline in sector employment
The associations noted that Turkey's annual exports of ready-to-wear, textile, leather, and carpets exceed $30 billion, but due to the economic challenges faced over the past two years, employment in the sector has decreased from 1.3 million to 1 million.
The presidents convened to assess the increasing production costs just before the announcement of the new minimum wage. It was indicated that during a period of shrinking global demand, costs have risen well above the world average, with Turkey's production costs being 40%-50% more expensive than those of Asian countries and 15%-20% more expensive than many European countries.
Foreign production and labor loss
The statement noted that due to high costs in Turkey, some companies are relocating their production abroad, which could lead to irreparable consequences. It was highlighted that due to the tendency of firms to move abroad, there is also a risk of losing valuable expertise and skilled labor that has been accumulated over many years. These losses could have profound economic and social impacts.
The presidents expressed that in order to mitigate these negative consequences, support for labor-intensive sectors must be increased. The statement emphasized that the burden of the minimum wage should not rest solely on employers, suggesting that the government needs to take more effective steps regarding tax policies and premium supports. The exporter associations pointed out the importance of such structural regulations for maintaining the long-term competitiveness of the sectors.