New Special Consumption Tax Proposal: Details Revealed on Price Changes and Affected Vehicles

Introduction to the New SCT Proposal

The recently introduced Special Consumption Tax (SCT) proposal does not encompass passenger vehicles. If this legislation is enacted, the upcoming tax increases will be exclusively targeted at 4x4 off-road pickup trucks. Notably, there are no anticipated changes to the existing tax rates for standard passenger cars, ensuring their current taxation remains unaffected.

Expansion of Presidential Authority and Future Tax Policies

Under Article 14 of the proposed legislation, the authority of the President to set SCT rates will be broadened. This increased discretion allows for the potential adjustment of tax rates based on specific technical criteria, such as engine displacement for fossil fuel-powered vehicles, and range and battery capacity for electric vehicles. Although these measures are not immediately implemented, they establish a framework that could shape future tax policies and vehicle classifications.

Current SCT Rate Structures and the Need for Updates

Contrary to some expectations, there will be no radical overhaul of the existing SCT base rates. According to reports from Hürriyet, Turkey's current SCT system applies rates ranging from 45% to 80% for vehicles with engine capacities below 1600 cc. However, since the base thresholds have not been revised since 2022, the lower tax brackets have become largely ineffective. Instead of adjusting these brackets, the new proposal seeks to rename the existing rate categories to reflect current vehicle prices, thereby maintaining the overall tax burden without actual rate modifications.

Potential Price Increase for Pick-Up Trucks

The proposed SCT hike is expected to significantly impact 4x4 pickup trucks with a maximum laden weight of 3,500 kg. The applicable rate will escalate from 4% to a substantial 50%. For instance, the Volkswagen Amarok Style model's tax obligation is projected to increase by approximately 1.3 million TL. Consequently, this will push the vehicle's retail price to roughly 4.5 million TL, reflecting the substantial tax impact on the market.

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