Stopping the rising dollar exchange rate could not prevent the inflation-induced increase in automobile prices. According to the statement made by ODD today, the excise duty taken from the car can be reset. Here are the details…
ODD started to work: SCT from the car can be reset!
Earlier last month, Treasury and Finance Minister Nureddin Nebati said that a tax base arrangement would be made instead of the SCT reduction. As a matter of fact, although it was said that it would enter into force on 1 December at first, the regulation entered into force with the President’s Decision published in the Official Gazette on 24 November 2022, as it created a recession in the market.
However, this step was a temporary solution that only affected vehicles with a sales price of less than 600 thousand TL, given the rising automobile prices. In fact, there were models with an increase in prices, even though we expected their prices to decrease as of December 1st.
SCT tax regulation has arrived! How much discount will there be on brand new cars?
The SCT tax regulation, which is expected to arrive on December 1, 2022 for the automobile, entered into force with the Official Gazette published today.
Today, an unexpected statement came from ODD (Automotive Distributors Association). Association President Ali Haydar Bozkurt said that a more permanent solution is needed and they are working on resetting the SCT on the issue.
Of course, this is not something that can be accomplished in a day. Because both the market and the state should be extended to the medium-long term in order not to suffer from this situation. Bozkurt also said that it would be more logical to regularly lower the SCT taken from automobiles every year. His explanation is as follows:
The world is changing rapidly. When we talked about it 30 years ago and took it as an evaluation, we are faced with a product technology that goes beyond the separation of normal under 1,600cc engine volume and luxury above it.
It does not seem possible for us to continue with a tax system that still works with such scales. Our medium-term expectation is to open another clean issue in this business and to ensure that the criteria are reviewed. A system should have been introduced to describe new technologies. In this way, we can enable vehicles with developing technology to reach users in our country more easily. In this way, we will easily have more environmentally friendly cars.
Of course, when we wake up tomorrow morning, we all want the excise tax to be removed from our lives. Because mobility is not a luxury, it is a necessity. The removal of SCT from our lives is not something that can happen overnight. Our suggestion here is to reduce the SCT gradually by executing the process with the right planning. In the scenario we are working on ourselves, this can happen in the range of 10-15 years. Of course, we worked on this by considering the sustainability of the country’s economy. The question of how we will create added value from this is also very important.
If we, as a country, announce to the world that we attach importance to the automotive industry and explain correctly that Turkey is a region where manufacturers can invest, everything can go to a completely different point. Europe-Middle East-Russia, we are at the heart of all this flow.
We have advantages such as highway and seaway. We can say that we are very strong in terms of sub-industry and quality awareness. While we have all these advantages, matters such as volume and stability in the domestic market push the manufacturer into the background.
When we look at the sales, we see that we are constantly skidding at a certain level. The basis of these are the regulations that we talked about from the first moment. For this reason, a very clear roadmap should be created and the plan should be adhered to.
If you say that I will gradually reset this SCT, you should gradually reduce the rates you give each year. While the gradual nature of the process allows companies to manage possible losses, sticking to the plan will also serve as an environment of trust in order to attract big brands to Turkey. Investments to be brought to the country are a solution for the losses to be experienced on the state side of the process, as well as lowering the SCT.
What do you think about this subject? Do you think the SCT from the car can be reset as stated? Don’t forget to share your views with us in the comments!