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Turkey’s Tax Policy: A System Exploiting the Public

Turkey’s tax policy has become a tool for economic exploitation, imposing significant financial burdens on people’s daily lives. High taxes on products ranging from automobiles to electronic devices reduce purchasing power and negatively affect living standards. This article explores how Turkey’s tax policy exploits the public, with a particular focus on the impact on iPhones and electronic devices, as well as cars imported from China.

High Taxes: The Foundation of Economic Burdens

The taxes applied in Turkey are among the highest globally. These taxes are one of the government’s primary revenue-generating methods, but they place a significant financial burden on citizens. Here are some examples of the taxes and their rates in Turkey:

  • Value Added Tax (VAT): Applied at a rate of 18% on most goods and services. This tax is present on almost all products except for essential goods.
  • Special Consumption Tax (SCT): Applied on luxury consumption goods, automobiles, electronic devices, and alcohol/tobacco products, with rates ranging from 20% to over 200%.

These high tax rates significantly increase the final prices of products, causing consumers to pay much more.

40% Tax on Cars Imported from China

Recently, Turkey introduced a new regulation imposing a 40% tax on cars imported from China, further increasing the financial burden on the public. This tax makes affordable Chinese cars significantly more expensive, placing a heavy cost burden on consumers. For example, a Chinese car costing 200,000 TL will rise to 280,000 TL due to this tax, forcing people to pay more for these vehicles. This regulation exacerbates economic injustice by making it difficult for low-income families to access affordable cars.

iPhones and Electronic Devices: A Tax Haven

Prices of high-tech products like iPhones in Turkey are among the highest globally due to taxes. Here’s a detailed breakdown of the cost of an iPhone in Turkey:

  1. Customs Duty: Like all imported products, iPhones are subject to customs duty, typically around 10%.
  2. Value Added Tax (VAT): Applied at a rate of 18%.
  3. Special Consumption Tax (SCT): Applied on electronic devices at a rate of up to 50%.
  4. Environmental Fee and Other Charges: Additional small percentages for environmental fees and various charges.

For example, a 1 TB iPhone 14 Pro Max, which costs 1,599 USD in the US, would be priced as follows when imported to Turkey:

  • Customs Duty: 1,599 USD + 10% = 1,758.90 USD
  • SCT: 1,758.90 USD + 50% = 2,638.35 USD
  • VAT: 2,638.35 USD + 18% = 3,113.26 USD
  • Other Charges: Approximately 50 USD

As a result, the final price in Turkey is around 3,163.26 USD (approximately 95,000 TL).

Impact on the Public: Declining Living Standards

These high taxes directly affect citizens’ purchasing power, lowering living standards. High taxes on products like electronic devices, which have become essential in daily life, create technological access inequality. Students, workers, and others struggle to afford these products due to high prices.

Tax Policy and Economic Justice

Turkey’s tax policy creates a system that increases income distribution inequality. High taxes place a disproportionate burden on low and middle-income citizens, undermining economic justice and leading to social unrest.

Broader Economic Impacts

The new tax on Chinese car imports can also have broader economic consequences. High car prices may lead to a decline in overall car sales, affecting not only importers but also dealerships, service centers, and related industries. This downturn could result in job losses and reduced economic activity in the automotive sector. Additionally, the increased cost of vehicles may deter foreign investors who view the high tax environment as a barrier to market entry. This reluctance could slow down technological advancements and foreign direct investment in Turkey’s automotive industry.

The Need for a Balanced and Fair Tax System

Turkey’s current tax policy increases the financial burden on the public and leads to economic exploitation. A more balanced and fair tax system would allow the government to generate revenue while protecting citizens’ living standards. Revisiting tax policies and implementing reforms to increase purchasing power are critical for sustainable economic growth.

In conclusion, the economic burden imposed by high taxes highlights the need for Turkey to establish a fairer and more equitable tax system. Understanding and addressing these dynamics can help Turkey progress toward an economic policy that benefits both industries and citizens.

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