Tax expert Ozan Bingöl reminded that unless President Tayyip Erdoğan decides otherwise, the special consumption tax (SCT) on alcoholic beverages and tobacco products will “automatically” increase by 25-30 percent on the morning of January 3, 2023.
According to the Special Consumption Tax Law, the fixed and minimum specific tax amounts on liquor and cigarettes are determined by the rate of change in the last six months in the producer price index (PPI) announced by the Turkish Statistical Institute (TUIK) in January and July.
In order for this increase not to happen, President Tayyip Erdoğan must take a decision and it must be published in the Official Gazette.
Therefore, if no such decision is taken by Erdoğan, the fixed and additional fixed taxes on alcoholic beverages and tobacco products will automatically increase at the rate of the D-PPI increase for the 2022-July-December period, with the announcement of the PPI figures by the Turkish Statistical Institute on January 3, 2023 at 10:00 am.
Ozan Bingöl, in his article on Vergiyedair.com, recalled the aforementioned hike system and calculated the hike rates in January.
Bingöl wrote: “At the time of writing this article, we have July-November 2022 PPI data. In this case, we can make predictions about the automatic SCT increase rate on January 3, 2022 by simulating the December 2022 PPI rate.”
The calculations of the tax expert are as follows:
2022 December, when monthly change in D-PPI is 1 percent, alcohol and tobacco SCT automatic increase rate = 23.81 percent
2022 December, when monthly change in D-PPI is 2 percent, alcohol and tobacco SCT automatic increase rate = 25.04 percent
2022 December, when monthly change in D-PPI is 3 percent, alcohol and tobacco SCT automatic increase rate = 26.27 percent
2022 December, when monthly change in D-PPI is 4 percent, alcohol and tobacco SCT automatic increase rate = 27.49 percent
2022 December, when monthly change in D-PPI is 5 percent, alcohol and tobacco SCT automatic increase rate = 28.72 percent
In other words, on the morning of January 3, 2023, there will be an increase of 25-30 percent in the SCT of alcoholic beverages and tobacco products.
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