Istanbul, Jul. 7, (dpa/GNA) - Turkey has hiked up taxes, including the value-added sales tax (VAT) and those for consumer loans, as the country struggles to fund a growing budget deficit following months of election spending and destruction after a devastating earthquake.
The VAT was raised to 20% from 18%, according to an announcement in the Official Gazette on Friday. The rate for certain goods and services, such as restaurants and hotels, was raised by two percentage points to 10%.
The fee for visa, notary and passports saw a 50% hike while tax on bank consumer loans increased to 15% from 10%. Taxes on all types of lottery and betting were also pushed up.
The tax rise comes as President Recep Tayyip Erdoğan – who was recently elected to a third term – searches for ways to finance election promises, including salary hikes and bonuses. Funds are also needed for reconstruction, after February’s major quake in the country’s south-east, which killed more than 50,000 people.
The government puts the earthquake damage costs at as much as $100 billion.
The hike on indirect taxes will affect millions of Turkish households that have been grappling with the highest inflation in over two decades, reflected in lower buying power, higher food prices and rents, among other costs.
GNA