New regulation on tax on cigarettes

In order to reduce the pressure of cigarettes on inflation, the proportional tax on cigarettes was reduced and the lump sum tax was increased.

The Presidential Decree on the subject came into force after being published in the Official Gazette.

With the decision, the taxation structure of cigarettes was changed by redetermining the special consumption tax rates and fixed tax amounts.

The Minister of Treasury and Finance will execute the provisions of the decision.

According to information obtained from the ministry, the proportional tax on cigarettes was reduced and the lump sum tax was increased in order to reduce the pressure of cigarettes on inflation.

Thus, the proportional special consumption tax rate on cigarettes was reduced from 57 percent to 53.5 percent, and the lump sum tax per pack was increased from 5.7424 lira to 7.8 lira.

This change in the taxation structure was arranged in a way that would not cause any revenue loss in the budget, while reducing the multiplier coefficient of cigarettes from 5.17 to 4.38. Thus, cigarette companies will only need to increase cigarette prices by 4.38 lira instead of 5.17 lira to cover the cost increase of 1 unit.

The aim of the regulation was to ensure that cost increases would lead to fewer price changes as part of the fight against inflation.

Tags