Türkiye ditches tax on new commercial vehicles: Erdoğan

Turkish businesspeople will be exempted from special consumption tax (ÖTV) while replacing their commercial vehicles, President Recep Tayyip Erdoğan announced on Monday.

“Our tradespeople who are engaged in transport services via taxi, minibus, midibus, bus and commercial cargo by truck will not have to pay special consumption tax when purchasing the same type of vehicles,” Erdoğan told a crowd in the town of Gemlik in the northwestern province of Bursa.

Erdoğan’s remarks come as Türkiye is heading to the presidential and parliamentary elections set for May 14, seen as the most crucial vote in the centurylong history of the republic.

Among others, the president also said those who sell products they manufacture at home online would be included in the scope of the tax exemption. He added that they would raise the exemption limit from TL 320,000 (nearly $16,500) to TL 700,000.

Erdoğan recalled arrangements made in recent years, saying they had excluded business incomes from income tax.

“We have made an unprecedented arrangement by not levying income taxes on our tradespeople, such as barbers, tailors, grocers, greengrocers and taxi drivers,” he noted.

“Currently, 830,000 such individuals benefit from both income tax and value-added tax (VAT) exemption.”

Gemlik is home to a major port and a factory of Türkiye’s first domestically produced automobile, Togg.

Erdoğan was later on Monday due to attend an inauguration ceremony for a plant that will manufacture batteries that will power the fully electric vehicle.

The vehicle is being manufactured by a consortium of five Turkish companies called the Automobile Initiative Group of Türkiye, or Togg, in cooperation with the Union of Chambers and Commodity Exchanges of Türkiye (TOBB).

The consortium inked a deal with Farasis, one of the world’s most prominent companies, to build a lithium-ion battery factory near Togg’s production site in Bursa.

Erdoğan has long sought to fulfill a long-held dream of building Türkiye’s first national automobile, part of his vision of turning Türkiye into an economic powerhouse.

Togg launched mass production of its T10X, a C-segment SUV, last October and started deliveries earlier this month. The T10X will be initially sold with one engine type and two battery options.

The model will feature battery packs with capacities of 52.4 and 88.5 kilowatt-hours, boasting ranges of 314 and 523 kilometers (195 and 325 miles), respectively.

The batteries of the Togg T10X can be recharged to up to 80% from 20% in less than 28 minutes at fast-charging stations.

Besides the SUV, Togg will manufacture another four models – a sedan, C-hatchback, B-SUV and B-MPV – by 2030. The sedan will follow the mass production of the SUV.

The current production capacity stands at around 100,000 vehicles per year, which is expected to reach 175,000 once Togg’s factory reaches full capacity.

The brand aims to produce 1 million vehicles across the five segments by 2030.

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