Turkey Hikes Taxes, Fees to Pay for Spending Pledges, Quake Toll

(Bloomberg) -- Turkey raised a swathe of taxes and fees to boost the government’s income as it tries to fulfill election spending promises and rebuild a region devastated by earthquakes.

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The new measures — some of which go into effect immediately and others over the coming days — increase several value-added tax rates to 10% from 8% and to 20% from 18%. A range of administrative government fees was also hiked by 50%, according to a decree in the Official Gazette on Friday.

President Recep Tayyip Erdogan boosted fiscal spending ahead of elections in May, raising wages, offering early retirement to millions and providing subsidized loans. The economy also took an estimated $100 billion hit from a pair of deadly earthquakes in February.

The new hikes follow a proposal by Erdogan’s governing AK Party to increase corporate taxes and levies for banks.

Read More: Turkey’s New Bill Could Help With its Ballooning Fiscal Gap

On Thursday, Treasury and Finance Minister Mehmet Simsek promised to reinstate fiscal discipline by reducing the budget deficit.

Other measures include:

• Turkey’s banking and insurance transactions tax on consumer loans raised to 15% from 10%

• Fee to register mobile phones bought from abroad raised by more than 200% to 20,000 liras ($766)

• Various taxes on betting games increased

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