Features
4 oct 17

Turkey steps back from 40% car tax rise

Turkey has stepped back from dramatic plans to raise its annual motor vehicle tax (MVT) by 40% from January. The huge increase was announced last week by Finance Minister Naci Ağbal, but a Government spokesman has since said that following a cabinet meeting the actual increase will be limited to a ‘reasonable level’.

A 40% increase would have a serious impact on fleet running costs, pushing up the MVT on 1300-1600cc engine cars to 1449 liras (€345); 1601-1800cc engine cars to 2558 liras (€609); and 1801-2000cc engine cars to 4,290 liras (€1,000).

The result would see monthly lease rates jump by €8.5 for cars with engines of up to 1.6 litres; and by €24 euros per month for cars with engines of up to 2 litres.

This will have a significant impact on Turkey’s fleet sector, which has 350,000 cars on operating leases and a further 50,000 daily rental cars.

According to industry estimates, a leasing company with a fleet of 20,000 vehicles would see its monthly motor vehicle tax bill rise by €200,000, although some leasing companies have terms in their contracts that allow them to pass on these cost increases to customers.

The MVT increases are part of a wider Government initiative to raise an extra 28 billion liras (€6.7 billion) in revenue next year. 

Authored by: Jonathan Manning