Turks wake up to New Year price hikes, dozens of services hit

ISTANBUL

Turkish citizens have woken up in the New Year to face a series of price hikes across various fields, from electricity to bridge and highway tolls.

Fees for dozens of state services have also been hiked, including passport and driving license fees, which came into force on the first day of 2018. Previously announced raises in motorized vehicles taxes have also become operational.

Electricity prices have increased an average of 8.5 percent, according to a government notice, which was issued in the Official Gazette on Dec. 30.

While electricity costs were up 8.4 percent for industrial and commercial enterprises, household costs were up 8.8 percent, according to the notice.

The last hike in electricity charges was made in 2016.

With the recent increase in electricity charges, the average monthly electricity costs of a four-person household will exceed 100 Turkish Liras ($27), the Chamber of Electrical Engineers (EMO) has said in a statement.

The chamber also claimed that the main reason behind the price hike was not a rise in energy costs, but an increase in electricity distribution costs.

Raises in bridge and highway tolls

The government has also started to raise bridge and highway tolls.

The tolls for the first and second bridges over the Bosphorus Strait and highways have increased by 10 to 25 percent, depending the size of vehicles as of the first day of 2018, according to a statement by the Ministry of Transportation, Communications and Maritime Affairs on Dec. 30.

During a press meeting to announce the 2017 results and 2018 targets on Dec. 29, Transport Minister Ahmet Arslan said toll increases on bridges built using the Build-Operate-Transfer (BOT) model, along with their connecting highways, would be decided according to foreign exchange rates on Jan. 2.

“When we were setting the tolls for the third bridge over the Bosphorus and the Osmangazi Bridge last year, we used the dollar parity on Jan. 2, 2017, when the dollar-lira parity was 3.53. Now it is 3.78. We expect an 8 or 9 percent mean increase in tolls. The bridge toll for the Osmangazi Bridge was fixed at $25 last year, but the costs have gradually come to exceed $40. The state picks up the rest,” he said.

Motorized vehicle taxes

An increase in motor vehicle tax between 15 and 25 percent has also come into force. The original 40 percent rise was slashed to these rates in October, after the initial hike prompted outcry among consumers.

The 25 percent tax rise applies to vehicles with engines larger than 1,300 cc. For cars with engines less than 1,300 cc, there will be a 15 percent hike in tax, officials previously noted at the Turkish Parliament’s Planning and Budget Commission.

In line with the latest inflation rate, the reevaluation tax rate was announced as 14.47 percent, and fees for various fields, including passports and driving licenses, leapt up by this amount on the first day of 2018.