Economy in Turkey: Excise duty hike on alcohol and cigarettes

The amount of excise duty on alcoholic beverages and cigarettes was increased by 14.82 percent. The new hikes hit drinks such as high-alcohol raki, whiskey and gin the most. The tax of a liter of raki was increased by 58 liras including VAT. The tax hike will be reflected in prices.

The law, which is in force so that special consumption tax (excise duty) rates on alcoholic beverages and cigarettes will be automatically increased at the producer price index (PPI) rate every 6 months, has led to a new round of increases.

In addition to the cost-related hikes for drinks and cigarettes that came a few days ago, the PPI hike will come now. The Turkish Statistical Institute (TURKSTAT) announced that the 6-month PPI was 14.82 percent.

REVENUE ADMINISTRATION INCREASES EXCISE DUTY RATES

President Erdogan had the authority to apply automatic increases if need be. However, he did not use his authority. The Directorate of Revenue Administration (GIB) increased the excise duty rates by 14.82 percent with a jet speed, as soon as inflation was announced.

Of the excise duty hikes, the most affected drinks were raki, whiskey, gin and wine. With the new hikes, the excise duty load of the liter raki increased from 331.6 liras to 380.7 liras. The excise duty of the raki increased by 49.1 liras per liter.

40 TL PER LITER HIKE IN SOME WHISKEY PRICES

Some whiskey brands were raised more than 40 liras per liter on their products the day before the excise duty hike. However, it is stated that these increases may also be insufficient with the new taxes.

With the new hikes, the excise duty on wine increased from 26.5 liras to 30.44 liras. The excise duty taken from beer also increased from 5.40 TL to 6.19 TL. However, since 63 percent of the relative excise duty is levied on the sales price of beer, the impact of the increase will be limited.