Automobile excise duty tax base regulation was in vain!

In the last few years, the price of all technological products, especially automobiles, has been increasing due to exchange rate changes and inflation. For this reason, from time to time, expectations similar to tax cuts may occur in the public. As a matter of fact, the SCT tax regulation made in November last year met this expectation and we saw discounts in almost all brands. But as of now, this arrangement has been in vain.

Automobile prices have risen: SCT tax regulation has been in vain!

As we mentioned at the beginning of our news, as the prices of automobiles and other technological devices increase, expectations such as tax reductions may occur in the public. However, due to the current economic conditions in Turkey, we are faced with tax hikes that are the opposite of these expectations.

Of course, although the automobile SCT tax regulation has caused a reduction in the past year, this is not its purpose in a smoothly functioning system, and it is actually an application that aims to bring a balance to the automobile prices in the market by considering their purchasing power. You can think of it simply as charging more tax on people who buy luxury cars, and lower taxes on affordable areas.

Until November of last year, the following excise tax base levels were valid for the automobile:

• Engine displacement not exceeding 1600 cc
  • SCT base 120 thousand TLnot exceeding – 45 percent
  • SCT base 120 thousand TLover the 150 thousand TLnot exceeding – 50 percent
  • SCT base 150 thousand TLover the 175 thousand TLnot exceeding – 60 percent
  • SCT base 175 thousand TLover the 200 thousand TLnot exceeding – 70 percent
  • Others – 80 percent
• Engine displacement above 1600 cc and below 2000 cc
  • SCT base 130 thousand TLnot exceeding – 45 percent
  • SCT base 130 thousand TLsurpassing, 210 thousand TLnot exceeding – 50 percent
  • Others – 80 percent
• Vehicles with an engine displacement of more than 2000 cc:
  • No excise tax base limit: 220 percent
• Only electric motor cars SCT base rates:
  • Engine power not exceeding 160 kW
    • SCT base 700 thousand TLnot exceeding – 10 per cent
    • Others- 40 percent
  • Engine power exceeding 160 kW
    • SCT base 750 thousand TLnot exceeding – 50 percent
    • Others – 60 percent

However, as the entry price of automobiles in Turkey increased, 80 percent of the vehicles with 45 percent SCT began to be taken. So whether you buy the most luxurious and expensive car or the cheapest, the same tax rate was applied. Therefore, the following regulation, which is currently in effect, has been made:

• Engine displacement not exceeding 1600 cc
  • SCT base 184 thousand TLnot exceeding – 45 percent
  • SCT base 184 thousand over TL 220 thousand TLnot exceeding – 50 percent
  • SCT base 220 thousand TLover the 250 thousand TLnot exceeding – 60 percent
  • SCT base 250 thousand TLover the 280 thousand TLnot exceeding – 70 percent
  • Others – 80 percent
• Engine displacement above 1600 cc and below 2000 cc
  • SCT base 228 thousand TLnot exceeding – 45 percent
  • SCT base 228 thousand TLsurpassing, 350 thousand TLnot exceeding – 50 percent
  • Others – 80 percent
• Vehicles with an engine displacement of more than 2000 cc:
  • No excise tax base limit: 220 percent
• Only electric motor cars SCT base rates:
  • Engine power not exceeding 160 kW
    • SCT base 700 thousand TLnot exceeding – 10 per cent
    • Others- 40 percent
  • Engine power exceeding 160 kW
    • SCT base 750 thousand TLnot exceeding – 50 percent
    • Others – 60 percent

With this regulation, many cars in the 80 percent segment were withdrawn from the SCT base of 50-60-70 percent. Therefore, some 20 thousand TL, some 60 thousand TL cheaper. However, as of now, there is no car in the class of 280 thousand TL and below.

So once again, all cars fell into the 80 percent segment. But a new regulation is not expected in the near future. In addition, since the SCT rate from vehicles has risen to 80 percent by itself, a new tax increase is not expected on automobiles.

However, let’s say that the issue can be brought to the agenda, as the tax on affordable cars can be reduced with a possible regulation, as it can be increased in the upper classes and a balance can be achieved again without any loss (or even with a possible increase) in the tax.