On Tuesday, Turkey instituted a 6 percent increase in fuel taxes, following comments by the country’s finance minister over the weekend indicating that adjustments to taxes on fuel and tobacco would not undermine the government’s inflation targets.
According to a presidential decree published in the Official Gazette, the special consumption tax on fuel has been raised approximately 6 percent per liter. This adjustment occurs biannually and is typically influenced by fluctuations in the producer price index (PPI). The PPI has recorded a cumulative rise of 7.12 percent over the last five months since the previous tax increase, indicating that the new tax hike is below this benchmark.
Authorities plan to release a revised PPI on January 3, 2024, with expectations of an upward adjustment. Fuel taxes are known to significantly influence inflation rates.
However, Finance Minister Mehmet Simsek emphasized on Sunday that the tax increases on fuel and tobacco set for the upcoming year will be calibrated to ensure they do not disrupt the nation’s inflation outlook for 2025. As of November, Turkey’s annual inflation rate stood at 47.1 percent, a figure that surpassed expectations but marked the lowest rate since mid-2023. estimate of 21 percent.
