TESK President Palandöken: VAT Increases Should Not Be Reflected as Price Hikes

Foreks - The President of the Confederation of Tradesmen and Craftsmen, Bendevi Palandöken, stated that the increases in Special Consumption Tax (SCT) should not be reflected as price hikes. He mentioned that in the past year, there have been six price increases for tobacco and two for alcohol, and the new SCT increase should not be passed on to prices. He added, “Increases in SCT on tobacco and alcohol will further boost smuggling. Consequently, it will reduce our state's revenues even more. These SCT hikes should not be reflected in prices because they are already very high, which significantly contributes to the escalation of smuggling. Nearly 20% of tobacco, tobacco products, and cigarettes, along with 10 million liters of the 50 million liters of alcohol consumed, are consumed illegally,” he said.

Palandöken also reminded that due to illegal production and homemade alcohol, many people have become disabled or lost their lives, stating, “Looking at the financial balance of illegal production, there is approximately a 100 billion TL loss in tobacco. It is not difficult to estimate the loss in alcohol. Due to illegal production and homemade alcohol, dozens of people die or become disabled every day. While it should be harder to access alcohol, purchasing alcohol in canisters from websites selling freely and producing it at home according to recipes only increases illegal production. If SCT increases are passed on to prices, the escalation in prices will further trigger tendencies towards smuggling. In 2024, there have been six price increases for tobacco and two for alcoholic beverages, and prices have skyrocketed. People have started to look for alternative ways to afford these prices. Some are buying tobacco to roll their own cigarettes, while others are trying to make alcohol at home. However, because the dosages cannot be adjusted correctly, many people are losing their lives,” he stated.

Palandöken emphasized the need for steps to prevent smuggling, not reflecting SCT increases in prices, and raising public awareness. He noted, “Our Ministry of Finance needs to be sensitive about this issue and take measures to prevent SCT increases from being passed on to prices. The rise in tobacco and alcohol prices, which is one of the main contributors to inflation, always increases smuggling even further. While the enforcement agencies are monitoring this situation, our citizens also need to be vigilant. Products purchased from unlicensed or unreliable sources can lead to life-threatening situations. Especially, these products, perceived to be very cheap, leave only sorrow and tears for the rest. Necessary steps should be taken to prevent smuggling and raise public awareness without passing SCT increases on to prices. Otherwise, these ruthless individuals engaged in illicit trade will continue to harm the national economy every day with thousands of bottles or containers full of illegal products.”