500 billion in additional taxes! Will the bill for the election economy be passed on to the citizens?

Minister of Treasury and Finance Mehmet Şimşek has denied claims that SCT and VAT will be increased immediately after the elections, but market expectations point toward hikes following the polls.

According to a report by Erdoğan Süzer from Sözcü, it is stated that the government will make changes to many taxes, primarily Value Added Tax (VAT) and Special Consumption Tax (SCT), after the elections in order to cover budget expenditures. It is also noted that the collection of some of the taxes and revenues that the state had previously waived or refunded will begin. For all of these, an omnibus tax bill is expected to be submitted to the Grand National Assembly of Turkey (TBMM) after the elections. 

500 BILLION LIRA MAY COME OUT OF CITIZENS' POCKETS

The total amount of taxes and revenues that the state will waive this year exceeds 947 billion lira. If a decision is made to collect half of this resource, it is projected that approximately 500 billion lira will come out of the pockets of citizens and enter the state treasury.

Furthermore, with the impact of increases to be made in VAT rates for products and services currently below 20 percent, as well as in SCT, a new wave of price hikes is expected to rain down on citizens after the elections.

In Turkey, rates of 1 percent, 10 percent, and 20 percent are applied to VAT, excluding exemptions and exceptions. The government is expected to increase the VAT on some products in the 1 percent group, which consists of basic food items, to 10 percent, and to increase the VAT on some goods and services currently at 10 percent—such as clothing, wastewater, and bridge and highway tolls—to 20 percent.

News Source: 12punto