Tax incentives provided by the government of Turkey to the Star Oil Refinery of the State Oil Company of Azerbaijan (SOCAR) in Izmir, have taken effect, Turkish newspaper Resmi Gazete reported on Tuesday.
Within the project is an exemption from payment of value added tax and customs duties. In general, it is envisaged to simplify the taxation up to 90 per cent and during the construction of the refinery the state will provide a VAT refund.
Also, within seven years, Turkey will pay the minimum amount of insurance to employees of the oil refinery and allocate $50 million (five per cent of the total investments) as an aid in the payment of interest
The total capacity of the refinery is 10 million tons and oil products produced at the plant will be directed to meet the needs of the Petkim chemical complex and the Turkish domestic market.
Up to six billion dollars will be sent to back the construction of a new oil refinery in Turkey. The work will be partly financed by shareholders' funds (30 per cent) which will equal $1.8 billion, while the rest will be financed through bank loans, a SOCAR senior representative said earlier.
The annual production capacity of naphtha at the plant which is used by Petkim as a raw material, will reach 1.66 million tons. More than 80 per cent of the Petkim needs in naphtha are provided by imports. With the commissioning of the new refinery, dependence on imports will be reduced to zero./Trend/