Turkish addictions are quite expensive with very high taxes. People who like to frequently smoke and drink pay excessive consumption taxes. Turkey loves to tax people with addictions because they know they will keep buying. In fact, addiction related taxes are a main source of tax revenue for the Turkish state.
Ironically, the state denounces smoking and alcohol and passes many laws to restrict them. However, its three year budget forward relies solidly on tobacco and alcohol tax revenue. The government projects it will make around 65 billion TL in 2020 from cigarette tax. Interestingly, the government actually believes consumption will increase despite the high taxes. Thus, people will continue to smoke and drink regardless of the prices, in their view.
The last two years has been extremely expensive to drink and smoke. Government revenue shortfalls prompted it to focus more on the addicted consumers. Consequently, taxes sharply increased more than expected resulting angry consumers. Consumption taxes (alcohol) automatically increases twice a year in January and July, so many try to stock up before the taxes increase.
Other less addictive products like coffee, tea, cola and sugar are taxed a lot less but still are on the government’s radar. However, if smoking rates subside, then coffee and cola might be targeted.
How are taxes calculated?
- Special consumption tax (OTV), percentage varies depending on the the government’s calculation (e.g. tobacco 67%)
- Sales tax (KDV) 18%
- Total tax = OTV + KDV (Usually implemented in January and/or July)
How much tax is a consumer paying?
- A pack of cigarettes at 17TRY, 86% in taxes (highest tax in the world)
- Hookah 250g pouch, 84% in taxes
- A can of beer at 11TRY, 50% in taxes
- A bottle of wine at 45TRY, 24% in taxes
- A bottle of Raki or Vodka 150TRY, 70% in taxes
In conclusion, Turkish addictions are very expensive and will soon get even more expensive. The average consumer will have to make a decision to either pay more or cutback.
Also, as prices rise, bootlegging and illegal cigarettes will start to flood the market. Thus, alcohol poisoning will rise and black market economy emerge along with more crime and less revenue for the Turkish state.
