Erdogan raises taxes in Türkiye

In light of the difficult economic situation and the high costs after the devastating earthquake, the Turkish government raised several taxes, some significantly, with immediate effect.

Among other things, value-added tax and taxes on personal loans are affected, the government announced in the Official Gazette on Friday.

Accordingly, the value-added tax was increased by two percentage points, to 20 percent. For certain goods and services, for example in the restaurant trade, the tax rate has been revised to 10 percent – an increase of two percentage points. Fees for visas, notaries and passports increased by about 50 percent, while taxes on bank loans rose from 10 to 15 percent.

The highest inflation rate in more than two decades

The tax hike will affect millions of Turkish families, already struggling with the highest inflation rate in more than two decades. This is likely to be reflected in higher food and rent prices and lower purchasing power, among other things.

The reason for the increase is due, among other things, to campaign expenses for the presidential elections in May, after which Recep Tayyip Erdogan, who was re-elected, begins his third term. Erdogan is looking for ways to fund his campaign promises, such as salary increases or bonuses. In addition, funds are needed for reconstruction after a severe earthquake in the southeast of the country in February, which killed more than 50,000 people. Overall, the government estimates the cost of earthquake damage to be up to $100 billion.

sda/tpfi