Turkey has increased the VAT on goods and services from 18% to 20% while hiking the 8% VAT rate applied to certain items to 10%. The new rates will be effective as of July 10. Economists forecast that the increase in VAT will create an extra income of 30 billion liras for the government this year, according to reporting by the Dünya newspaper.
The increase in taxes is not limited to only VAT. Foreign phone registration fee jumped from 6,019 liras to 20,000 liras; consumer loans banking taxes increased from 10% to 15%; whereas fee for visa, notary and passports has gone up 50 percent. Also, taxes for all types of lottery and betting have seen an increase.
These tax hikes came shortly after the government doubled the motor vehicles tax (MTV) and increased the general corporate tax from 20% to 25%. Economists forecast that the increase in corporate tax will create an income of more than 100 billion liras for the government, whereas the increase in MTV will lead to an additional income of about 40 billion liras in 2023.
Oyak Yatırım economists noted that the increase in all of these taxes will make up 2% of the total central government budget revenue.
Earlier this week, the government submitted its proposal of a 17.55 percent plus 8,077 liras increase for the civil servant's salaries, making the lowest salary 22,017 liras. Such an incrase will create an extra cost of over 120 billion liras on the government budget expenses, Dünya newspaper said.