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Turkey announces new tax cuts to fight high inflation

The Turkish lira has lost roughly 60 per cent of its value since 2021.

IANS | Ankara |

Turkish President Recep Tayyip Erdogan has announced value-added tax (VAT) cuts on several products to fight inflation.

The VAT cuts included mostly necessities, such as hygiene products and medical equipment, Erdogan said at a press conference after a cabinet meeting.

“We have decided to reduce the VAT on products such as detergent, soap, toilet paper, napkins and baby diapers from 18 per cent to 8 per cent,” Xinhua news agency quoted the Turkish leader as saying.

The government will also reduce the financial burden on the construction industry by cutting the VAT on landed property to 8 per cent, the President added.

In the agricultural sector, the country will reduce VAT to 1 per cent on all kinds of certified seed, seedling and sapling deliveries, and to 8 per cent for some products such as milk collection tanks, according to Erdogan.

The country’s inflation soared to 54.4 per cent in February, the highest in nearly 20 years.

Under price hike pressures, the government reduced in February the VAT on basic food products from 8 per cent to 1 per cent.

Erdogan announced in December last year a record 50 per cent rise in the minimum wage to help offset surging living costs amid high inflation.

Turkey’s central bank has kept the benchmark interest rate unchanged since January, halting an easing cycle that sparked a currency slump in the latter half of 2021.

The Turkish lira has lost roughly 60 per cent of its value since 2021.