As inflation escalates to a near 20-year high in Turkey, President Recep Tayyip Erdoğan has announced that the value-added tax (TAX) on basic food products would be lowered from 8 percent to 1 percent.
"Under our VAT System Simplification Program, we’re cutting the VAT (value-added tax) on basic food products from 8% to 1%," Erdoğan said on Feb. 12.
The decision, published in the Official Gazette, went into effect on Feb. 14.
The cut includes staples such as flour, rice, pasta, meat, fish, tea, coffee, water, milk and dairy products, cheese, eggs, oils, sugar, fruits, vegetables, nuts, and legumes.
"Fighting inflation requires a total determination, belief, and sacrifice," Erdoğan said, adding that the government is taking the steps it pledged towards this end.
The new move amounts to a 7% discount on food products, he said.
The president said that products with their VAT reduced to 1% will have a significant weight in the inflation basket and that the tax reduction also means an important gain in the fight against inflation.
Turkey on Feb. 3 reported an annual inflation rate of 48.69 percent in January, the highest in two decades, whereas the independent inflation group ENAG put the figure at 114.87 percent.
Inflation has been particularly acutely felt in housing prices, food, and utilities.