Reuters reported that a senior Turkish finance ministry official told Reuters that an exemption on the payment of value added tax on securities linked to steel and other commodities held in storage is expected to take effect soon in Turkey.

The VAT reform was part of legislation passed last week which was designed to minimize the impact of the global financial crisis on Turkey, including both tax measures and steps to boost employment.

The London Metal Exchange has long sought passage of the reform, which was within legislation ratified by Turkey"s parliament last week and is now awaiting presidential approval.

The report quoted the official as saying that "This is not specially for the London Metal Exchange, but a regulation in the law prevents the imposition of VAT on the quotation of any security linked to goods while they are held in storage in Turkey.”

The LME launched steel billet futures last February and the VAT issue was an obstacle which prevented the full participation of Turkish mills in the market.