New tax regulation targets cars costing over TL 40,000
by Daily Sabah
ISTANBULNov 26, 2016 - 12:00 am GMT+3
by Daily Sabah
Nov 26, 2016 12:00 am
Speaking to reporters about the regulation on special consumption tax, Finance Minister Naci Ağbal said on Friday a hike between TL 2,360 ($682) and TL 26,550 will be applied to cars that cost over TL 40,000. Ağbal clarified that the special consumption tax-based increase will not be applied to cars costing less than TL 40,000. He said that following the inclusive assessments in the sector, the Cabinet has published its decision on the increase in general rates. Suggesting that one of the main features of the new system is the switch to a new tax system with a decreasing rate, Ağbal said if the price of the car is below certain ranges, these rates are pulled down. Ağbal stated that the rate is 60 percent in vehicles with 1600 cc engines, but for the vehicles costing between TL 40,000 and TL 70,000, the rate is reduced to 50 percent. "We have reduced the tax rate on low-priced vehicles. Today, 96 of the 100 cars sold in the market consist of vehicles under 1600 cc, while only 3-3.5 percent have a capacity between 1600 cc-2000 cc," Ağbal noted. Pointing out that vehicles costing less than TL 40,000, which constitutes the 42 percent of the market, will not be subject to any tax hike, Ağbal said a tax raise ranging from TL 2,360 to TL 4,130 will be applied to the vehicles costing between TL 40,000 and TL 70,000, which cover 40 percent of the market. 17 percent of the vehicles below 1600 cc costs over TL 70,000. The price of these vehicles will increase by TL 12,390, Ağbal said, adding that the price of the vehicles with a capacity between 1600 and 2000cc that cost below TL 100,000 will increase by TL 11,800, while those exceeding TL 100,000 will be subject to an increase of TL 23,600.
On the other hand, a 6 percent increase will be applied to vehicles with a capacity of over 2000 cc, amounting to TL 26,550.
Finance Minister Ağbal underlined that the new regulation will contribute around an additional TL 3 billion to the budget.