The excise tax rate on cigarettes has been reduced. To compensate for the decrease in tax revenue resulting from this reduction, the fixed tax amount has been increased. This adjustment was made to limit the inflationary effect. Changes were made to both the excise tax rate and fixed tax amount on cigarettes, while adjustments were also made to the composition of the excise tax. The Presidential Decree on the matter was published in the Official Gazette and came into effect.
CHANGE IN EXCISE TAX AND FIXED TAX RATE ON CIGARETTES
Through the decision, the excise tax rate and fixed tax amount on cigarettes were redefined. According to information obtained from the Ministry of Treasury and Finance, changes were made to the composition of the excise tax in a way that would not lead to any changes in tax revenues. As part of this, while a reduction was made in the excise tax rate on cigarettes, an increase in the fixed tax amount was implemented to offset the decrease in tax revenue resulting from this reduction.
AIMING TO LIMIT THE INFLATIONARY EFFECT
With the adjustment, the multiplier effect of cigarettes was reduced from 4.4 to 3.8, aiming to support the fight against inflation as a fiscal policy measure. As a result, the amount of price increase required for cigarettes due to a 1 lira cost increase is now 3.8 lira instead of 4.4 lira. This was noted as a fiscal policy step taken in line with budget objectives to limit the inflationary effect.