Site icon Turkish Minute

Turkey cuts VAT on electricity to 8 pct amid protests over high energy bills

People burn their electricity bills as a protest against high energy prices in on February 9, 2022, as temperatures plunged well below freezing in Ankara and energy prices soared. Energy prices in Turkey and other countries have soared in the past year due to recovering demand and geopolitical tensions. But Turks have also seen their overall purchasing power dwindle dramatically amid a currency crisis and two-decade high inflation that reached almost 50 percent last month. Adem ALTAN / AFP

Turkey has reduced the sales tax on electricity used in residences and agricultural irrigation from 18 percent to 8 percent, President Recep Tayyip Erdoğan announced amid widespread protests in the streets and on social media over the rising electricity prices the country has faced since the beginning of the new year.

Turks started 2022 with news of jacked-up prices, fueled by a currency crisis amid the highest rate of inflation in nearly two decades.

Turkey’s Energy Market Regulatory Authority (EPDK) announced on Jan. 1 that it had raised electricity prices by 52 percent for lower-use households for the new year and 127 percent for high-use commercial users.

Turks had demanded that the government roll back the price hikes in demonstrations held across the country, with many protestors saying there had been a two- to threefold increase in the electricity bills they received in the first month of 2022 and some merchants saying that had to pay electricity bills surpassing their monthly rent.

Erdoğan told a news conference after a cabinet meeting in Ankara on Monday that Turkey had reduced the VAT on electricity used in residences and agricultural irrigation from 18 percent to 8 percent, in a move to combat soaring inflation.

“By the summer months, we will have brought the inflation that has been plaguing our nation under control to a great extent,” the president said.

Erdoğan also said the scope of the progressive tax on electricity consumption had been expanded to include businesses in addition to households.

According to the two-stage electricity billing system, in which the EPDK set the new limit as 240 kilowatt-hours as of March 1, consumption up to 240 kilowatt-hours a month will cost TL 1.26 per kilowatt-hour for nearly 32 million households across the country, while consumption above this limit will cost TL 1.89 per kilowatt-hour, the EPDK explained in a statement on Tuesday.

The regulatory authority added that consumption up to 900 kilowatt-hours a month will cost TL 2.05 per kilowatt-hour for businesses across the country.

The EPDK also said the scope of the household group of electricity users was expanded to include headquarters and branches of associations and foundations, cemevis –- Alevi places of worship –- and facilities used for the supply and distribution of drinking water in villages.

The changes come after the Federation of Alevi Associations last month announced that they refused to pay high electricity bills for cemevis, which were considered to be businesses, the group subjected to the highest increase among electricity users in Turkey, before the recent regulations.

The new year’s price hikes put a heavier financial burden on Turks, who were already challenged by the 44 percent depreciation of the Turkish lira against the US dollar last year, which significantly reduced their purchasing power, as well as annual inflation, which reached its highest level in 19 years at 48.69 percent in January.

Among those who protested the price hikes for 2022 was Kemal Kılıçdaroğlu, leader of Turkey’s main opposition Republican People’s Party (CHP), who said in early February that he wouldn’t pay his electricity bills until Erdoğan rolled them back.

Even some pro-government circles voiced their frustration about the high energy bills. Yusuf Kaplan, who writes for the pro-government Yeni Şafak daily, tweeted on Jan. 29 that there was almost a 100 percent increase in electricity bills following the latest price hikes. He called on President Erdoğan to cancel the price hikes, which he said would make financially challenged people suffer.

Liked it? Take a second to support Turkish Minute on Patreon!
Exit mobile version