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Turkey targets luxury cars with tax hike

Staff Writer |
Turkey increased its special consumption tax on cars on November 25, a move that will be applied to all but the cheapest models.

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Speaking to reporters in Ankara, Naci Agbal said that no increases would be applied to cars that cost less than 40,000 Turkish Liras ($11,578). Models costing 40,000-70,000 lira would see a price rise of around 3 percent, he said.

The change, which Agbal said would contribute around an additional 3 billion lira to the budget, is seen as potentially positive for sales of mass-market cars made in Turkey as it would drive up the cost of luxury competitors, many of which are imported.

“The goal is not to obtain revenue, it is to amend the system’s broken structure and move to a just and new taxation system,” Agbal said.

Under the current system, imported luxury cars with smaller engines are in the same tax bracket as mass-market models, many of them made in Turkey by firms including Toyota and Renault, or Ford Otosan and Tofaş, local joint ventures with Ford and Fiat.

The new system will make even smaller-engine luxury cars more expensive.

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