President Recep Tayyip Erdogan on Monday reiterated the government’s determination to combat rising consumer price, warning companies of heavy fines if they fail to comply and act contrary to latest tax reduction on staple foods.
Turkey lowered the value-added tax (VAT) on dairy products, fruits, vegetables and others basic food items to 1% from 8%. the decision, announced by Erdoğan on Saturday, entered effect on Monday.
In support of the moving country retailers called for a whole-out “fight” against rising food prices, urging all actors in the supply chain to join the campaign.
Authorities stepped up inspections as of On Monday, a day after Trade Minister Mehmet Muş said that government would act for ensure the reduction in VAT reached son goal.
Muş warned that the harshest fines would be imposed on companies that fail to take into account the VAT reduction in prices and “harm” citizens with excessive price increases.
“With verification teams on at set upwe will apply severe punitive sanctions against those who take the opposite steps against the position we have taken,” Erdoğan told a press conference of son trip to the United Arab Emirates (UAE).
the government will create a task force to inspect prices and a mobile app for help citizens find the cheapest goods, Treasury and Finance Minister Nureddin Nebati said on Saturday.
Official data for January showed consumer prices rose 48.69% annually, a 20-year high. Food and non-alcoholic beverage inflation exceeded 55%. the government pledged to act and pledged to protect households against skyrocketing prices.
Emphasizing that the government won’t let inflation ‘crush our nation’, Erdoğan says on companies to cut prices by 7% from Monday to reflect the change. He said basic food play an important part in inflation.
Representatives of the real estate sector welcomed the tax reduction and called for businesses in the food business to hire in the campaign tame rising prices.
That of the sector head organizationFood Retailers Association, on Sunday expressed hope that the VAT cut would pave the way way for a whole-out mobilization against inflation.
“We are basically facing cost inflation,” the association said. in A declaration. “Therefore, we call on all our business partners, from manufacturer and carrier to supplier and warehouses, to fight food inflation together.
The annual producer price index (PPI) exceeded at 93% in January, according to official The data.
“Aware of responsibility, we are committed to supporting the cooperation needed to reduce Food prices in lasting and permanent way together with our business partners while doing maximum efforts to take account of the reduction in VAT on the prices on shelves,” the association said.
On the other hand, price discounts on products like eggs, pasta, rice, oil and dairy products began to reflect in the metropolis of the country, the president of said the Istanbul Retailers Association.
“This VAT regulation, which applies to basic food items, which are important necessities of our consumers, is quickly reflected on the shelves,” Faruk Güzeldere told Anadolu Agency (AA).
“As an association, even if it was a Sunday yesterday, we immediately mobilized our employees and immediately passed on this VAT regime in our prices.”
the government kissed a model based on reduce borrowing costs, saying that credit, exports and investment help the country weather inflation.
Erdoğan said that new economic path will be also ultimately help Turkey solve it’s chronic current account deficit problem and help stabilize lira.
AT support the drivethe center of Turkey bank had brought down the key policy rate per 500 points since September at 14% but interrupted the easing cycle in January.
The Turkish Lira has been broadly stable since the start of the year following 44% decline in 2021.
Read it closed last weekdays at 1:49 p.m. against United States dollar. It traded at 1:55 p.m. to 4 p.m. local time on Monday.
Because Turkey relies on imports for its energy needs as well as the raw materials materials and many foodstuffs, prices have skyrocketed.
In response, the government increased the minimum wage by 50% for 2022. Rates of gas, powerpetrol and road tolls also increased to take into account for import price volatility.
Electricity prices have increased by 125% for high-demand commercial users and approximately 50% for inferior-demand early households of January.
Households, traders, city councils and religious community groups last week complained about the rising energy costs. the government said it worked on a redevelopment of energy bills and new measures can be announced soon.
“I hope This (price reduction in food products) will continue,” said Barış Taşkın, a customer of a local market in Küçükköy district of The Gaziosmanpaşa district of Istanbul. “We want the VAT (cut) to be applied on other products as well. Even a small the number is important for our budget. You can see the price going down.”