The morning of July 7, 2023 will go down in Turkish history as the day when citizens woke up to a more expensive life. Not that life was not already expensive amid inflation and with a devalued national currency. But the decision to raise taxes on scores of products and services announced in the Official Gazette that night just made life for millions of Turks even harder. According to the announcement, the value added tax [VAT] rate charged on goods and services increased from 18 to 20 percent, while that on basic goods such as toilet paper, detergents and diapers was raised from 8 percent to 10 percent. A range of administrative government fees was also hiked by 50 percent. #KendiDüşenAğlamaz [as you make your bed so you must lie on it], a Turkish proverb, was trending on Twitter briefly, with users addressing the ruling party's voter base, for being responsible for the recent hikes, having voted for the ruling Justice and Development Party (AKP) in May's general election. The news of price hikes started trickling in on July 5 when price hikes on tobacco and alcohol as well as petrol made the headlines. The reasoning behind such drastic measures were manifold, from empty state coffers to the growing costs for earthquake repair, which by some estimates totals to USD 100 billion. “Reducing the budget deficit is the aim of the latest increase in taxes and fees, and some other steps to ensure fiscal discipline are on the agenda too. Spending cuts are planned as well,” a senior official told Reuters. In another life, I studied economics but that was long time ago. Hence, I cannot claim to undestand the specific technicalities that lie behind policy. What I am almost certain about is that Ankara is determined to erode the middle class. — Sinem Adar (@sinemadar) July 7, 2023 As one economist described the recent hike, this was “an economic coup.” In a tweet, academic Veysel Ulusoy wrote, “what do you say to this overnight economic coup?” As taxes on registering new mobile phones jumped by over 200 percent some Turks rushed to Georgia to buy new devices and register them the same day to avoid paying higher fees: Turks are driving to neighbouring Georgia to buy smartphones as phone registration fee jumps 233% tomorrow. They would like to buy them and register them today There is more than 100% tax on a typical iPhone sale price pic.twitter.com/EzEH0E4wla — Ragıp Soylu (@ragipsoylu) July 7, 2023 In Istanbul, some grocery stores were rampaged through over the weekend before the hikes went into effect. “They came in yesterday and finished everything,” said an employee at a local car wash on July 10, in an interview with Global Voices. “They bought everything [before prices went up]. Toilet paper, paper towels, all of it.” Journalist Melis Alphan, responding to the most recent hikes, wrote on Twitter, “continue to put the burden of the economy you have sunk on the consumer. How long will you oppress the citizens?” Lawyer Oguzhan Aslan tweeted, “the state has misunderstood the concept of spreading the tax evenly across the base and instead just offloaded the tax payments onto the backs of the base.” Academic Prof. Dr. Şenol Babuşcu accused the ruling AKP for having the citizens pick up the tab of the election costs: AKP iktidar partisi olarak girdiği için seçimi devlete finanse ettirdi. Devletin finanse ettiği seçimin bedelini halk ödüyor ve daha da ödeyecek… — Şenol Babuşcu (@senolbabuscu) July 7, 2023 Since the AKP entered [the election race] as the ruling party, it had the election financed by the state. The public is paying the price for the state-financed election and will pay even more… Similarly, member of the opposition Republican People Party (CHP) Abdurrahman Tutdere said, “The heavy burden of the election economy has been put on the back of the citizen,” following the decision that was announced overnight. When all of Turkey was asleep, with a signature of the AKP Chairman the value-added tax for soap, shampoo, detergent, disinfectant and wet wipes, toilet paper, paper towels, tissues and napkins was increased from 8 percent to 20 percent, and the tax on registering mobile phones purchased abroad, was increased from 6 thousand Turkish Lira to 20 thousand. Notary, passport and visa fees were increased by 50 percent. Meanwhile, the minimum wage was raised by 34 percent and the civil servant by 17.55 percent. The most bitter prescription was imposed on the citizen. Overnight, the rate of increase, put on citizen's tap reached 339 percent in total. Separately, on July 5, a draft law was introduced in the national parliament by AKP lawmakers seeking to increase the corporate tax to 25 percent from 20 percent to fund earthquake-related costs and measures.
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