Turkish government has introduced a string of tax increases in January 2021.
The special consumption tax (SCT) on alcoholic beverages and tobacco products has been increased by 17.07%.
The fixed SCT for a bottle of beer is now 2,3933 lira (1 USD = TL 7.43) with a bottle of beer being usually sold from between TL 12 to TL 14. The price of one bottle of rakı, a traditional anise-flavored drink, is now TL 159.50 with TL 78.20 of it being SCT. The increase in the SCT also raises the value-added tax (VAT) of a bottle of rakı by TL 2.40.
Under nearly 19 years of rule by the Justice and Development Party (AKP), prices of alcoholic drinks have been increased by about 1,800%, mostly through taxes. Critics claim that the AKP, which defines itself as a conservative party, has political motives behind the excessive pricing.
The government collected 20 billion lira (USD 2.7 billion) of taxes from alcoholic drinks and tobacco products in 2020, which amounted to 12% of its tax income, according to Ministry of Treasury and Finance data.
On 29 December 2020, the figures for real estate tax to be applied in 2021 were published by the Ministry of Treasury and Finance Revenue Administration’s General Communique on Tax Procedure Law in the Official Gazette.
Real estate tax, which is paid in two installments per year, in May and November, has increased by 4.55%. People who declare that they have no income, those who only receive payments from social security institutions, veterans, disabled people, martyred widows and orphans are exempt from paying real estate tax on homes that do not exceed 200 square metres.
n 29 December 2020, the figures for motor vehicle tax to be applied in 2021 were published by the Ministry of Treasury and Finance Revenue Administration’s General Communique on Tax Procedure Law in the Official Gazette.
Motor vehicle tax will increase by 9.11% ranging from TL 109 to TL 50.107.
Annual motor vehicle taxes vary according to engine size, value and age as below:
According to the announcement, vehicles with an engine capacity of 1.3 litres or below will pay between TRY 109 and TRY 1,261.
Vehicles with an engine capacity between 1.3 and 1.6 litres will be subject to motor vehicle tax between TRY 216 and TRY 2,197.
Vehicles with an engine capacity between 1.6 and 1.8 litres will pay between TRY 387 and TRY 3,881.
Vehicles with an engine capacity between 1.8 and 2.0 litres will pay between TRY 595 and TRY 6,113.
Vehicles with an engine capacity between 2.0 and 2.5 litres will pay between TRY 901 and TRY 9,170.
Vehicles with an engine capacity between 2.5 and 3.0 litres will pay between TRY 1,256 and TRY 12,786.
Vehicles with an engine capacity between 3.0 and 3.5 litres will pay between TRY 1,769 and TRY 19,472.
Vehicles with an engine capacity between 3.5 and 4.0 litres will pay between TRY 2,536 and TRY 30,616.
And last vehicles with an engine capacity more than 4.0 litres will pay between TRY 3,556 and TRY 50,107.
Electricity was increased by 6% as from the beginning of 2021.
Two price increase came to natural gas early in 2021. The first increase of 21% was announced as of the beginning of January 2021. The second increase of 1% was introduced as of the beginning of February 2021.
Bridges and Highway tolls
An average 25% price increase was applied to bridge and highway use by vehicles. The toll cost for cars of using the Bosphorus Bridge and the Fatih Sulatn Mehmet Bridge has increased from TL 10.50 to TL 13.25, the Osmangazi Bridge from TL 117.90 to TL 147.50, and the Yavuz Sultan Selim Bridge from TL 21.90 to TL 27.50 (a 25.5% increase).
Avrasya Tunnel toll
The toll cost of using the Avrasya Tunnel under the Bosphorus one way has increased by 26% for cars to TL 46 and for minibuses to TL 69. This tunnel was built using the build-operate-transfer model.
Special Communication Tax
The Special Communication Tax, commonly known as the “earthquake tax”, has been increased to 10% from 7.5%.
Pay Rise Increase for state employees and pensioners
State employees received a pay rise of 7.36% and pensioners a rise of 8.36% as from the beginning of the year. The lowest monthly wage paid to state employees increased from TL 3,812 to TL 4,092, the lowest monthly wage paid to retired state employees increased from TL 2,814 to TL 3,021. The lowest monthly wage paid to retired workers increased from TL 1,335 to Tl 1,447. The lowest monthly wage paid to retired tradesmen increased from TL 1,627 to TL 1,763. The lowest monthly wage paid to retired farmers increased from TL 1,534 to TL 1,662.