With the exorbitant price increases in the automotive industry with the pandemic, it was a dream for a fixed income citizen to buy a car, while the base limits to be applied in the purchase of new vehicles were changed, but this regulation was also insufficient. EBS Consulting General Manager Erol Şahin stated that the vehicles sold in the upcoming period will remain in the lowest 80 percent Special Consumption Tax (SCT) segment. Şahin said, "There is a need for a serious tax base arrangement based on real inflation."
With the exorbitant price increases in the automotive industry with the pandemic, buying a car has become a dream for citizens with fixed income. The SCT tax regulation on new vehicle purchases introduced in January was ineffective in 4 months. Erol Şahin, General Manager of EBS Consulting, stating that 72 percent of new vehicles remain in the 80 percent SCT zone, noted that this rate will increase even more in the coming days, and called for “a regulation in line with real inflation.”
THE REGULATION WAS SO LOW
In the Official Gazette published in January, in the tax base regulation, the base limits to be applied in the purchase of new vehicles were changed and the number of tax brackets was increased. It was stated that automobiles with a SCT base not exceeding 120,000 Turkish Liras (TL) would be included in the 45 percent tax rate bracket. Stating that the change in the tax base that was put into practice affected a handful of vehicle models at the beginning, Şahin added, “A regulation far below the expectation was made in the SCT base. The fact that it was ineffective in 4 months is an indicator of this.”
THE REGULATION MADE IN JANUARY DID NOT CONTRIBUTE TO THE CONSUMER
Reminding the tax base regulation made last year, Şahin stated that the previous regulation lost its effect due to the economic fluctuations experienced, and said, “The base regulation made in the past had no meaning with the increase in prices in a short time. Now, 2 new slices have been put in between, but this arrangement has lost its meaning since January. With the regulation made in January, the equivalent of the 50 percent slice in the tax base did not increase at all. It was a 'base slices' arrangement rather than an base regulation arrangement. The arrangement made in this state was half and incomplete because the tax base was not increased. It could not make a clear contribution to the sector and the consumer.”
REGULATION CAUSES 80 PERCENT SCT IMPLEMENTATION ON VEHICLES
Pointing out that the system put into practice could not withstand 4-month economic fluctuations, Şahin called for the decrease in purchasing power and the high inflation figures experienced by fixed-income citizens as a basis, and added, “A serious regulation is required. A regulation suitable for real inflation. Currently, the starting limit in the SCT base is 120,000 TL, this figure should be regulated as at least 240,000 TL. The current system causes 80 percent SCT to be applied to all vehicles.”