Turkish government plans tax cuts on industrial natural gas prices

The report said the final decision would be made during the talks with the International Monetary Fund.

 

The government had increased the natural gas prices for industries by 75 percent during 2008 and the manufacturers have been complaining about the increased costs as the country feels the impacts of the global credit crisis.

 

Turkey imposes two different types of taxes on energy prices. Special Consumption Tax (SCT) is implemented as a stable rate, while the Value Added Tax (VAT) is calculated on the price including the SCT.

 

Referans said the government could either decide to cut the SCT by 15 percent eventually causing a fall in VAT collection or could directly reduce the VAT rate.

 

The IMF will have the final word on the decision as it would reduce the tax incomes in the central budget.

 

According to the International Energy Agency data, Turkey has one of the highest tax rates on energy consumption with 19 percent, while this rate is 3.1 percent in France and 4.3 percent in Switzerland.