No raise for minimum wage, but... The price hikes coming in July have been announced

It has become clear that there will be no mid-year raise for the minimum wage, which millions of citizens were waiting for with curiosity.

According to the report by Erdoğan Süzer from Sözcü, the first hike will come on July 1 with a 38 percent increase in electricity.

Following that, the Domestic Producer Price Index (D-PPI) will be announced on Wednesday, July 3.

After the announcement by TURKSTAT, an automatic price hike of approximately 20 percent will be applied to the fixed amounts of the Special Consumption Tax (SCT) on fuel, alcohol, and cigarette products.

Insurance companies will also implement a 3.5 percent hike in July. TURKSTAT announced that the producer price index (PPI) increased by 17.87 percent in the first 5 months. If the PPI realizes at 1.5 percent in June, the 6-month PPI will be 19.64 percent; if it is 1.75 percent, it will be 19.93 percent; and if it is 2 percent, it will be 20.22 percent. Therefore, it is considered certain that the PPI, which will trigger the automatic hikes, will be around 20 percent.

HIKE IN FUEL

Currently, an SCT of 9.45 TL is collected per liter of gasoline and 8.86 TL for diesel. If the PPI increases by 20 percent, the SCT amounts will rise to 11.34 TL for gasoline and 10.63 TL for diesel. Since Value Added Tax (VAT) is also collected on top of the SCT, the tax burden will increase to 2.27 TL for gasoline and 2.13 TL for diesel. Thus, the price per liter of gasoline will rise from 42.40 TL to 44.67 TL, and diesel will rise from 42.51 TL to 44.64 TL.

ALCOHOLIC BEVERAGES

The fixed SCT amount for high-alcohol beverages such as rakı, whiskey, and gin, which is 1,062 TL, will be increased by 20 percent in July to 1,275 TL. Following this tax increase, the price of 1 liter of rakı will increase by at least 115 TL, rising from 1,075 TL to 1,190 TL. The tax burden on 1 liter of rakı, which has a total cost of 417.7 TL, will rise from 657 TL to 772 TL with the new hikes. Additionally, the SCT on all alcoholic beverages, including wine and beer, will be increased by around 20 percent.

CIGARETTES

The 20 percent hike will be reflected in both the fixed and minimum fixed SCT amounts on cigarettes. Thus, since the tax threshold, which is currently 50 TL, will rise to 60 TL, the tax increase will hit cheap cigarettes the hardest.