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Erdoğan warns of heavy sanctions for stores that increase prices despite VAT cut

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Turkish President Recep Tayyip Erdoğan has warned that his government will impose heavy penalties on stores that increase food prices despite a recent cut in the sales tax on basic food items from 8 percent to 1 percent, local media reported.

Erdoğan on Saturday announced the slashing of the value added tax (VAT) on dairy products, fruits, vegetables and other basic food items from 8 percent to 1 percent as inflation surges to a near-20-year high, standing at over 48 percent in January.

The tax reduction took effect on Monday.

Speaking to reporters at Atatürk Airport in İstanbul before traveling to the United Arab Emirates, Erdoğan said: “We will impose heavy sanctions on those who our inspection teams find are doing the opposite of what we’ve done [regarding prices].”

There were reports that some stores were raising prices despite the cut in the VAT, while others said the reduction in the tax was too small to bring the high cost of food down to prices wage earners can afford.

On Monday municipal police teams began to carry out inspections at supermarkets to determine whether they have changed the price of basic foods to reflect the VAT cut.

İstanbul police officer Volkan Küp told the Demirören news agency that in order to see the difference in prices they bought 11 basic food items from a supermarket on Sunday evening, which cost TL 241 ($17.78) and that the same items cost TL 227 ($16.74) on Monday morning.

Supermarket customer Ayşe Biricik told the agency that the drop in prices was too minor and that there’s not a significant difference between the old and the new prices.

“This isn’t enough. We want more support. The prices are still too high,” she said.

Inflation hit 48.69 percent in January, the highest level since Erdoğan’s Islamic-rooted Justice and Development Party (AKP) came to power two decades ago.

The lira lost 44 percent of its value against the dollar last year as Turks rushed to buy gold and foreign currency.

Many Turks have fallen below the poverty line, which stands at $4.30 per day.

Protests have been taking place for weeks across the country over declining purchasing power and the increasing cost of living due the high inflation.

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