THE New Year has brought with a host of tax increases – from everything from electricity to alcohol.
The Hurriyet Newspaper revealed that the cost of cigarettes, alcoholic drinks and electricity are all set to lighten our wallets after the government imposed price hikes.
The government increased special taxes on the goods two days after announcing a 30 percent hike in the minimum wage for workers.
The minimum fixed tax rate on tobacco products increased by 5.1 percent to 4.42 liras and the fixed rate by 25 percent to 0.25 liras to mark the New Year.
The minimum fixed tax rate for beer has been increased by 0.18 liras to 1.03 liras. The minimum fixed tax rate for two liters of rakı has been increased by 23 liras to 130.68 liras.
Electricity prices were also increased by 6.8 percent as of Jan. 1.
A special tax that is added to mobile phone sales has also been hiked by 30 percent to 160 liras.
The Turkish government will cover some 40 percent of the cost of a hike in the minimum wage for 8.5 million employees due to come into effect, Labor and Social Security Minister Süleyman Soylu said.
The minimum wage has been increased from 1,000 Turkish Liras to 1,300 liras, a move expected to cost the private sector around 20 billion liras ($9.2 billion), leading critics to warn of job losses.
Soylu announced the wage has been hiked as of the first day of 2016 after a number of negotiations between the cabinet and the private sector on late Dec. 30.
“We’ll meet around 9.7 billion Turkish Liras [$3.3 billion] of the cost from the hike,” Soylu said. “This move will create a burden on the budget, but a minimal tax increase was planned to mitigate the impact.”
Meanwhile, Turkey’s main economic challenge this year will be battling inflation amid a continuing increase in the rate, according to Turkish Deputy Prime Minister Mehmet Şimşek.
“The general trend in the inflation rate is not at desired levels and our inflation performance is relatively poorer than our general macroeconomic performance…We need to maintain solid steps in the fight against the rising inflation rate in 2016. This target can be achieved,” he said Jan. 4.
Consumer prices rose 8.81 percent year-on-year in December 2015, above estimates, data from the Turkish Statistics Institute (TÜİK) showed.
According to TÜİK data, the largest increase was seen in food and non-alcoholic beverages last month with a 1.24 percent hike. The steepest drop was seen in clothing and footwear with a decrease of around 2 percent.