Turkish gov’t cuts taxes on electronic goods, housing ahead of key referendum
ANKARAThe Turkish government has cut special consumption taxes on a number of electronic home appliances and has extended value-added tax (VAT) cuts on property acquisitions, in a bid to revive domestic demand ahead of a key constitutional referendum, which is expected to be held in April.
Special consumption taxes on air conditioners, refrigerators, washing machines, dish washers, vacuum cleaners and some small home appliances have been zeroed from 6.7 percent for the acquisitions until April 30, according to a cabinet decision, which was published in the Official Gazette on Feb. 3.
Cuts in the VAT for property acquisitions have also been extended to September by the cabinet.
Finance Minister Naci Ağbal said the recent tax regulations would revive the economy, especially the construction sector and home appliances sector.
“Citizens will also benefit from these regulations, as they usually speed up their acquisitions in these fields in the time frames, when the tax cuts are online. We can say that companies would launch new product campaigns, pushing down the prices,” he said in an interview with state-run Anadolu Agency on Feb. 3.
Shares in home appliance makers Arçelik and Vestel were both up more than 3 percent on the plans.
With the same cabinet decision, VAT on properties with the tax value of 500 to 1,000 Turkish Liras per square meter, has been declined to 8 percent until September for all housing projects, of which the construction permit was received between Jan 1, 2013, and Dec. 31, 2016, and the public tender was made after Jan. 1, 2013.
For properties with tax value above 1,000 liras per square meter, will be 18 percent.
The VAT on properties with a tax value of 1,000 to 2,000 liras per square meter has been declined to 8 percent until September for all housing projects, of which the construction permit was received after January 2017 and the public tender was made after this date. For properties with tax value over 2,000 liras per square meter, the VAT will be 18 percent.
VAT on wood, plastic and office furniture has been decreased to 8 percent until April 30.
Ağbal noted that the tax cuts in this field were extended to enliven the economy.
“Our citizens can buy properties by reviewing housing sketches and scaled models. In such cases, they must make a sale agreement with payments in advance in notaries. We have permanently zeroed the tax, which was applied in such agreements. We already slashed VAT on property acquisitions. We have extended these VAT cuts from the end of March to the end of September,” he said, adding that the recent cuts would cost the budget around 1 billion liras ($267 million).