Taxes in Türkiye have been greatly increased in some cases

In light of the difficult economic situation and the high costs after the devastating earthquake, the Turkish government increased several taxes, some of them significantly, with immediate effect. Among other things, the value-added tax and taxes on personal loans were affected, as announced by the government today in the Official Gazette.

According to the information, the value-added tax was increased by two percentage points, to reach 20 percent. For certain goods and services, such as gastronomy, the tax rate was revised to 10 percent — an increase of two percentage points.

Fees for visas, notaries and passports increased by about 50 percent, while taxes on bank loans rose from 10 to 15 percent.

The tax hike will affect millions of Turkish families, already struggling with the highest inflation rate in more than two decades. This is likely to be reflected, among other things, in higher food and rent prices as well as lower purchasing power.

Campaign spending and earthquake damage

The reason for the increase is due, among other things, to campaign expenses for the presidential elections in May, after which Recep Tayyip Erdogan, who was re-elected, begins his third term. Erdogan is looking for ways to fund his election promises, such as salary increases and bonuses.

Funds are also needed for reconstruction after severe earthquakes in the southeast of the country in February, which killed more than 50,000 people. Overall, the government estimates the cost of earthquake damage to be up to $100 billion.