In the midst of an economic slump, Turkey will increase its tax rates

Turkish inflation is at its lowest level in 18 months: 38.2% year-on-year, it was 85% in October 2022. While the country continues to suffer from this price increase and the depreciation of its currency, it is still suffering the consequences of the February 6 earthquake. The government wants to raise its taxes to help with reconstruction.

Turkey is preparing to raise taxes in many areas. © Francisco Seco / AP

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The stated objective is simple and ambitious: more than 600,000 homes must be rebuilt, half of them this year. A titanic project since the World Bank had estimated the damage of the earthquake of February 6 at 100 billion dollars.

To finance this reconstruction plan, the AKP, the party of President Recep Tayyip Erdogan, today tabled a bill in parliament to increase many taxes.

Companies will be taxed at 25% compared to 20% currently. Banks also see their taxation increase by 5 points from 25 to 30%. Personal taxes will not be affected, but the tax on motor vehicles will be doubled, announced Abdullah Güler, chairman of the AKP group in parliament. In order to encourage foreign trade, the most exporting companies should be excluded from these tax increases.

Recep Tayyip Erdogan, re-elected to the presidency in May 2023, had been strongly criticized for his management and unpreparedness for the earthquake that killed 50,000 people.

See alsoTurkey raises its key rate to 15% for the first time in two years

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