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On January 3, 2022, Turkey announced the domestic producer price index (PPI) inflation in the second
half of 2021 was 47.39 percent, therefore triggering an automatic increase in the fixed-amount Special
Consumption Tax (SCT) for alcohol beverages, soft drinks, fruit juice, and tobacco products.
The SCT is levied on beverages in addition to VAT and tariffs and accounts for approximately 65 percent of the
price of beer and distilled spirits in Turkey.
Turkey Increases Special Consumption Tax on Alcoholic Drinks and Tobacco Products…
On January 3rd, 2022, the Turkish Statistical Institute (TurkStat) announced the Domestic Producer Price
Index (PPI) inflation as 79.89 percent for 2021, the highest in last two decades. The PPI inflation in the
second half of 2021 was 47.39 percent, therefore triggering an automatic increase in the fixed-amount
Special Consumption Tax (SCT).
SCT is imposed on motor vehicles, petroleum and natural gas, alcohol, tobacco products, soft drinks,
fruit juice, durable consumer goods (such as refrigerators, dish washers, washing machines etc.) and
luxury items like fur, perfume, and jewelry.
Turkey’s Special Consumption Tax (SCT) was established in 2002, following the 2001 financial crisis
where dozens of banks went bankrupt overnight. The SCT was also a measure towards EU
harmonization since the EU uses a similar tax for some items non-necessary items like alcohol and
tobacco to discourage over consumption. In Turkey, the SCT functions as an important source of
funding for the national treasury as a tax; its main purpose is not as a social tool, like in EU.
SCT law mandates that the STC on “List 3” items in the appendix of the law will be automatically
updated every six months according to the domestic PPI inflation declared by TurkStat every January
and July. “List 3” items are soft drinks, alcoholic beverages, fruit juice, and tobacco products. The
President of Turkey can decrease or increase the amount with a decree in each term.
In June 2021, the president stopped the automatic increase for the second half of 2021, in order to fight rapid inflation,
according to his statement.
Source: USDA / FAS
