Turkey will soon introduce a new type of tax known as the Carbon Tax, abbreviated as KAV. Producers and, consequently, consumers will bear a new tax burden of billions of lira with the introduction of KAV.
As part of Turkey’s efforts towards decarbonization, it is estimated that the minimum amount Turkey may have to pay to Europe by 2032 will be 2.5 billion euros, approximately 72 billion Turkish Lira. This amount could increase several times over if the scope of taxable sectors is expanded (such as household appliances and automotive), potentially reaching 7 billion euros.
The Medium-Term Program (OVP), which serves as a roadmap for the economy for the years 2024-2026, also includes the Carbon Tax. In the OVP, it is emphasized that this issue will lead to a significant increase in costs and the following is noted:
“The European Union will impose taxes on goods with a carbon footprint it imports in the not-so-distant future. This tax is expected to affect industries such as iron and steel, cement, glass, ceramics, and plastics, leading to a significant cost increase and a competitive disadvantage.”
