Turkish gov’t extends tax cuts on electronic goods, furniture until September
Neşe Karanfil - ANKARAThe Turkish government has extended tax cuts on home appliances and furniture for a further five-month period in a bid to stir sluggish consumer demand, Prime Minister Binali Yıldırım stated on April 10.
“We are extending tax cuts in furniture and home appliances sales until September,” said Yıldırım, adding that the cabinet would also continue to apply tax cuts for small-scale tradespeople and employers as well.
The tax cuts in furniture and electronic goods came into effect in February and are expected to end by the conclusion of April.
The government cut special consumption taxes on a number of electronic home appliances and extended value-added tax (VAT) cuts on property acquisitions ahead of a key referendum on April 16 on whether to shift to an executive presidential system.
Special consumption taxes on air conditioners, refrigerators, washing machines, dish washers, vacuum cleaners and some small home appliances were reduced from 6.7 percent to zero for the acquisitions, according to a cabinet decision published in the Official Gazette on Feb. 3.
The VAT on wood, plastic and office furniture was also decreased to 8 percent.
Finance Minister Naci Ağbal said the tax cuts had created a 350 million-Turkish Lira ($94 million) cost to the budget, adding that the figure would likely increase to 800 million liras with the new extension.
At the same time, Ağbal suggested the cuts would ultimately boost the economy. “I believe that the tax cuts in furniture, home appliances and property acquisitions will enliven the economy in general. New jobs will be created and production levels will increase, making economy actors happy. We have already seen the signs of a rebound in the economy,” he said.
Ağbal said the ministry was also working on a plan to extend the tax restructuring scheme, which will likely cover payments that were obliged to be made by the end of March 2017.