Even for a man who knows his way
around Turkish leasing as well as Bülent Tasar does – he purports
to have been around since its foundation – fighting a war against
his country’s tax reforms was not an easy battle to win.
At the beginning of 2008 the Turkish Ministry
of Finance decided to adjust VAT rate for leasing from 1 percent to
18 percent. As a result, says Tasar, “at the beginning of last
year, there was a 35 percent decrease in industry volumes [from
€6.3 billion to €4.1 billion] compared to the previous year”.
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Faced with such pressures, it became a fight
for survival for the country’s leasing industry. Tasar, as the head
of FIDER, the Turkish leasing association, was right in the thick
of it.
It was not just straight speaking – something
he is well known for – that won the day. It also required intense
lobbying effort.
This quickly met with success, as soon after
the first representations to government were made the Turkish
government made some concessions, including a lowering of VAT
levies to 8 percent for construction and production machines.
Nonetheless, the VAT hikes meant a loss of confidence in the
leasing sector and, as a result, in 2008 Turkey saw a decrease in
volumes of around 9 percent.
Tasar comments: “Transaction volume dropped
even further, by 31 percent, compared to the previous year,
implying that the average ticket size of the sector had increased
from the €95,000 figure estimated at the end of 2007. Not
surprisingly, the changes in VAT directly affected the demand for
leasing, and the sector overall has seen a material decrease in new
business volumes.”
From the beginning
Tasar, however, has seen his
country’s leasing business through many ups and downs since he
started financing deals 24 years ago.
“I still remember my first leasing
transaction,” reminisces Tasar.
“It was a deal for 10 white Ford Granadas, for
a kitchenware company based in Denizli, Turkey. We were the
pioneers of the industry, and I’ve never looked back since. I’ve
been in the business as long as leasing has been in Turkey.”
Back in 1987, when his employer Iktisat
Leasing signed the Granada agreement, Turkey’s first leasing
legislation – Financial Leasing Law No.3226 – was little more than
a year old. But it was not long before the country’s unprecedented
industrial and commercial growth saw businesses of all types
embrace leasing.
A special VAT rate of 1 percent on equipment
leasing drove Turkish leasing growth forward at an astonishing rate
– averaging 50 percent per annum – and before long a number of
domestic companies were thriving in this environment.
Tasar moved from Iktisat in 1988, to become
general manager of Vakif Leasing, before going on to undertake a
similar role at Rant Leasing in 1992.
In 1997, after 10 years building up his
leasing experience, he joined newly-established Siemens Financial
Services, where, as managing director, he has spearheaded growth
ever since. The business is now one of the leading leasing
companies in the country, providing services both to Siemens’
customers, and to other businesses acquiring industrial and health
care assets.
Tasar’s lasting involvement in Turkish leasing
has also led him to become an active figure in the national
association (FIDER), and two years ago he became chairman of the
organisation. Although the association is relatively new,
established in 1994, it has attracted 36 members, believed to
represent 90 percent of Turkey’s total leasing business.
Challenging times
Even without the spectre of
worldwide recession, however, Turkey’s market development has not
however been without its challenges in recent years.
Tasar explains: “The past decade has seen some
major changes in the industry which have impacted leasing in
Turkey. There was the alignment to IFRS standards in 2003, which
had an initially negative impact, particularly for more taxed-based
multinational lessees, who could no longer benefit from off-balance
advantages.”
Contemplating the future, Tasar remains
optimistic – after all, SFS continued to grow under his leadership
through Turkey’s recession in 2001.
“In the short term, like most countries across
the globe, Turkey will face its challenges. But beyond that there
is still much to be done. Leasing continues to develop, and has a
relatively low penetration rate compared with other European
economies,” he says.
Opportunities, it appears, continue to exist
for international lessors that once had a much larger presence in
Turkey.
