Tax cuts on several items extended, bridge, highway tolls hiked
The Turkish government has extended the previously introduced tax cuts on several items, including house sales, furniture and white goods for another three months until the end of March this year in an effort to stimulate economic activity.
The value-added-tax (VAT) in housing sales and the furniture sector that were slashed from 18 percent to 8 percent will continue in the first three months of 2019.
Moreover, the special consumption taxes on domestic appliances were already suspended and this measure will also remain in place until the end of March.
As part of the same move, special consumption tax rates for motor vehicles with engines under 1600cc were cut to 15 percent and the government decided to keep the tax reduction for another three months this year.
The measure that slashed all VAT rates for commercial vehicles to 1 percent from 18 percent will also remain in effect until the end of March.
The reduction of title deed fees rate from 4 percent to 3 percent will also continue in the first three months of 2019.
Finance and Treasury Ministry Berat Albayrak announced the extension of the tax cuts in a tweet he posted on Dec. 31.
According to Reuters, economists estimate that the tax cuts initially introduced in the last quarter of last year would trim year-end inflation for 2018 by around 1 percentage point.
In its New Economic Program, announced in September the government forecast inflation to be 20.8 percent and 15.9 percent in 2018 and 2019, respectively.
The latest data from the Turkish Statistical Institute (TÜİK) showed that the annual inflation eased to 21.6 percent in November from 25.24 percent in October.
Meanwhile the private operators of the Osmangazi Bridge and Gebze-İzmir highway hiked the toll prices.
Accordingly, the toll price for the Osmangazi Bridge, which is the fourth-longest suspension bridge in the world and the second longest in Europe over the Marmara Sea, has been increased to 103.05 Turkish Liras ($19.2) from 71.75 effective from Jan. 1.
The toll for the Altınova-Orhangazi section of the Gebze-Orhangazi-İzmir has been hiked to 11.5 liras from 5.5 liras and the toll price for the Gemlik- Bursa Northern Toll Booth section has been increased to 15.65 liras from the previous 7.40 liras.
The government also has increased tax on alcoholic beverages.
An additional 13.4 percent special consumption tax has been added on alcoholic beverages. That followed the 15.5 hike in the special consumption tax for alcoholic beverages in July.
As a result, total tax on a 70 cc bottle of increased from 70.37 lira to 79.86 lira of tax while the tax on a 50 cc can of beer rose from 4.59 lira to 5.21 lira.