Türkiye has revised the special consumption tax on certain cars, as indicated in a notice published in the country's Official Gazette on Thursday, in a move officials said was primarily aimed at helping to reduce the current account deficit.
The change, made under a law protecting the value of the Turkish currency, revised tax base thresholds and rates for certain fossil fuel-powered passenger cars and some hybrid vehicles that use both fossil fuels and electric engines.
The law was adopted last week in the Parliament.
Accordingly, special consumption tax rates were reduced by 5-10 percentage points for some vehicles, maintained at the same level for others, while for some other models, rates were increased by 10-20 percentage points, the Treasury and Finance Ministry said in a written statement.
Türkiye has a large automotive manufacturing sector, but it also imports a significant number of cars.
The ministry said the overall inflationary impact of the changes would be minimal, estimating a net annual effect of just 0.0019 percentage points. It gave no details on the forecast impact on the current account deficit.
The updated rates will vary between 70% and 220% depending on engine size, for combustion engine cars. Meanwhile, the minimum rates will be 25% for electric vehicles and 45% for hybrid cars, as announced.
