Turkey hikes VAT rates, consumer loan tax and other fees – Turkish Minute

Turkey has increased its value-added tax by 2 percentage points in two categories while also raising the tax collected on bank consumer loans, Reuters reported, citing the country’s Official Gazette on Friday.

The VAT rate charged on goods and services was increased to 20 percent from 18 percent while that on basic goods such as toilet paper, detergents and diapers was raised to 10 percent from 8 percent, the gazette showed.

In the Gazette announcement effective immediately, President Recep Tayyip Erdoğan signed several decisions, including one that increased the Bank Insurance and Transaction Tax (BSMV) applied to consumer loans to 15 percent from 10 percent previously.

The registering fee for mobile phones that are brought from abroad was increased by 228 percent to 20,000 lira ($765.74) from the previous 6,091 lira, one of the decisions on the gazette showed.

Separately, Turkey also decided dividend payments of own shares purchased by companies listed on the Borsa İstanbul will be exempt from withholding tax.

The moves came after the introduction of a draft law in parliament earlier this week that seeks to increase corporate tax to 25 percent from 20 percent for earthquake-related funding needs.

The earthquakes in February in southern Turkey killed more than 50,000 people and left millions homeless. Business groups, economists and the government have said rebuilding efforts could cost Turkey more than $100 billion.