A 10 Lira Tax Hike Is Coming for Cigarettes: The Cheapest Pack Will Be 80 TL

July 2, 2025 BTT

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New Tax Increase to Hit Smokers in Turkey: A fresh round of tax hikes is about to affect cigarette prices in Turkey, and smokers are likely to feel the impact. Starting in July, a mandatory increase in the Special Consumption Tax (ÖTV), tied to inflation via the Producer Price Index (PPI), will raise cigarette prices by an average of 10 Turkish lira. The cheapest packs, currently priced at 70 TL, are expected to rise to at least 80 TL.

Inflation-Linked Tax Law Drives the Price Hike

Turkey’s tax law requires semi-annual adjustments to ÖTV based on the PPI. In the first five months of 2025, PPI rose by 12.92%, and economists predict the six-month figure will reach around 15%. Since ÖTV rises in direct proportion, cigarette prices will automatically increase as well. As a result, mid-range cigarette brands could see their prices jump from 80 TL to 90 TL per pack.

How Tobacco Taxes Are Structured in Turkey

The tobacco tax system in Turkey is multifaceted. It includes:

A percentage-based ad valorem tax currently set at 50%
A minimum lump-sum tax (“asgari maktu”)
A fixed lump-sum tax (“maktu”)

The most crucial component is the asgari maktu, which acts as a price floor. It currently stands at 1.8313 TL per cigarette, or roughly 36.62 TL per 20-cigarette pack. With the expected 15% increase, this amount will rise to approximately 42.11 TL.

Legal Pricing Floors Will Push Cigarette Prices Even Higher

Under current regulations, the asgari maktu must account for at least 50% of a cigarette pack’s final retail price. That means the minimum legal retail price for a pack will increase to at least 84.22 TL following the tax hike. Meanwhile, the maktu tax will also increase from 10.50 TL to about 12.07 TL. Once VAT is included, the total tax per pack will climb to nearly 65 TL.

March 2024 Reforms Helped Lower the Inflationary Multiplier

In March, a Presidential Decree raised the maktu tax from 8.39 TL to 10.50 TL while slightly reducing the ad valorem tax rate from 53.5% to 50%. This change, along with other fiscal policies enacted in 2024, helped reduce the so-called “financial multiplier” — the factor that determines how much a cost increase inflates retail prices.

Previously, a 1 TL increase in cost led to an average 7.5 TL jump in shelf prices. That multiplier has now dropped to 3.8, meaning price hikes are still impactful but less extreme than before.

Cigarette Prices Set to Climb, but Inflation May Be Milder

While the tax burden on cigarettes continues to rise, efforts to curb inflationary pressure are showing some results. Still, for regular smokers and consumers, a 10 TL increase per pack will be hard to miss — especially for low-income individuals or heavy users.