Tax on new vehicles raised to 27 percent

Bloomberg

refid:11881748 ilişkili resim dosyası

The new rate is valid for cars with engines of 1.6 liters or less, and will continue until Sept. 30, the Finance Ministry in Ankara said on its Web site Tuesday. The ministry also raised the tax on home appliances such as washing machines, which had been abolished as part of the stimulus measures, to 2 percent - still below the previous rate of 6.7 percent.

Prime Minister Recep Tayyip Erdoğan announced the package of cuts in March, seeking to preserve jobs and encourage spending. Tuesday’s changes mean the government is starting to phase out the tax cuts, which had reduced the car tax from 37 percent.

Taxes on furniture and computers, reduced to 8 percent from 18 percent in March, will stay at that rate until the end of September, the ministry said.

"Extension of tax cuts ... combined with recently eased credit conditions for households are likely to stimulate economic activity during the summer," Elif Küçükçobanoğlu, economist at Ata Invest in Istanbul, said in a note to investors. The first round of reductions helped companies "cut inventory levels and start rebuilding inventory, improving production figures."

The government also announced an increase in tax on tobacco products.