Turkey has raised fuel taxes by 6% on Dec. 31, per an official decree. Finance Minister Mehmet Şimşek said the hike, along with tobacco taxes, would not impact inflation goals. Inflation was 47.1 percent in November, with forecasts suggesting a drop to 26.5 percent by the end of 2025.
Turkey imposed a six percent tax hike on fuel on Dec. 31, after its finance minister said over the weekend that tax moves on fuel and tobacco would not affect the government’s inflation goal.
The special consumption tax per liter for fuel has been increased by around six percent, according to a presidential decree in the Official Gazette, which publishes new legislation and official announcements.
The special consumption tax on fuel is adjusted every six months based on the producer price index. With the 5-month cumulative PPI since the last increase standing at 7.12 percent, the latest tax hike is below the index.
Authorities will announce an update on the PPI on Jan. 3, when it is widely expected to increase.
Fuel taxes typically have a major impact on inflation.
But Finance Minister Mehmet Simsek said on Dec. 29 that tax hikes for fuel and tobacco in the New Year will be set in a way that does not affect the country’s 2025 inflation outlook.
Turkish annual inflation stood at 47.1 percent in November, higher than expected but at its lowest level since mid-2023. A Reuters poll forecasts that it will ease to 26.5 percent by end-2025, but higher than a central bank prediction of 21 percent.
duvarenglish.com