New tax thresholds for cars may take effect in December

ISTANBUL

Tax thresholds for new vehicles may come into force as of Dec. 1, which can lead to a 7 to 10 percent reduction in prices, local media has reported.

The news on new thresholds started to circulate following a meeting on Nov. 19 between Treasury and Finance Minister Nureddin Nebati and members of the Authorized Automotive Dealers’ Association (OYDER).

“We convened our expectation that the updating of tax thresholds should be done as soon as possible. The minister told us they are aware of the situation and working on it,” OYDER President Altuğ Ercii said following the meeting.

Experts say under the new thresholds for special consumption tax on cars, prices of small and medium-sized vehicles may decline between 7 and 10 percent.

After the news started circulating in the media, consumers contacted auto dealers to get more information. Many potential buyers are waiting for the anticipated price reduction to act, said a dealer in Istanbul. “Phone calls are pouring in. People are willing to wait for 10 days to have their cars, which is not a long time under the current situation where there are still supply problems for certain models of cars,” the dealer added.

The pre-tax price of most cars with 1600 cc engine or below is around 200,000 liras, and an 80 percent special consumption tax is levied on those vehicles, said Kağan Dağtekin, the CEO of Doğan Trend.

“We, as dealers, will be under pressure until Dec. 1. Many people will want to make the payment, including the value-added tax but have their cars registered later,” he added.

Presently, a 60 percent tax rate is levied on vehicles in a price band of 150,000 and 175,000 Turkish Liras, while the rate is 80 percent for those vehicles priced above 200,000 liras. The tax rate is 40 percent for vehicles priced at 120,000 liras or less.