Ankara reduces planned tax hike for vehicles from 40 percent to 25 percent

ANKARA

A planned 40 percent rise in the tax on motorized vehicles has been slashed to 25 percent, officials from the Finance Ministry announced on Oct. 13, after the initial hike prompted outcry among consumers.

The 25 percent tax rise will be applicable for vehicles with engines with the capacity higher than 1,300 cc. For cars with engines lower than 1,300 cc there will be a 15 percent hike in tax, officials noted at the Turkish Parliament’s Planning and Budget Commission.

The government vowed to reduce the planned 40 percent tax hike on motor vehicles to a “reasonable level” early in October amid sharp criticism from the public and opposition parties.

Just days after the proposed tax increase was announced last week by Finance Minister Naci Ağbal at a presentation of the government’s annual update of its medium-term economic program, President Recep Tayyip Erdoğan said the hike would be reviewed.

The authorities also dropped a planned increase in income tax from 27 percent to 30 percent.

During the session on Oct. 13, a draft regulation envisaging that the minimum wage could not be lowered under 1,404 Turkish Liras ($386) also passed.

Meanwhile, Turkey increased its special consumption tax on cars last November, applied to all but the cheapest models, in what officials at the time said was a response to demands from the industry.

Following these rises, the tax was rated at 90 percent for vehicles with engines between 1,600cc and 2,000cc and 145 percent for cars with engines over 2000cc.