ISTANBUL: Turkey has stepped up price thresholds for a special consumption tax on vehicles with small combustion engines, while adding more categories, the Official Gazette showed on Thursday, a move that will help cut vehicle prices.
A 60% tax rate is to be levied on vehicles with engines smaller than 1600cc in a price band of 150,001 lira to 175,000 lira, after the adjustment.
The rate rises to 70% for vehicles that cost up to 200,000 lira and 80% for those priced above 200,000 lira.
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Previously, all cars that cost more than 150,000 lira were subject to the 80% rate.
The maximum price for the tax rate of 45% was raised from 92,000 lira to 120,000 lira, and the threshold for the 50% tax rate was raised to between 120,000 and 150,000 lira.
Passenger vehicles sold in Turkey, already under a large tax burden, will see prices decrease as a result of the move, though the benefit is likely to erode quickly as sellers are expected to hike prices because of a weak lira currency.
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