Faced by a worsening budget deficit, the Turkish government has introduced a wide range of tax increases. This move follows changes to monetary policy which will result in an increase in bank interest rates and has allowed the Turkish lira to weaken against foreign currencies.
The value-added tax (VAT) on basic goods such as cleaning products was raised from 8% to 10%. The tax on all other products and services was raised from 18% to 20%. Fees for various administrative services, including passport, notary, and visa fees, were raised by 50%. Tax on consumer loans was increased from 10% to 15%.
Turkish citizens who buy smartphones abroad will now have to pay approximately TL 20,000 (USD 765) for the registration of their phones, an increase of 229% on the previous fee of TL 6,091. This hike prompted large queues at Turkey's border with Georgia as people rushed to buy phones and register them before the new fee comes into effect on Monday July 10th.
The Turkish government is planning to increase taxes on banks and corporations. A bill submitted by President Recep Tayyip Erdogan’s ruling AK Party proposes to increase the corporation tax rate for companies to 25% from 20%, and for banks, insurers, brokerages, pension firms and electronic payment companies to 30% from 25%.