May 02 2019

iPhone costs $2,700 in Turkey after phone, tobacco taxes hiked

Turkey doubled a tax on some mobile phones and increased tobacco taxes to raise more revenue for the budget.

Turkish consumers will have to pay special consumption tax of 50 percent on phones costing 1,500 liras ($252) or more before tax, up from a previous 25 percent, according to a decision made by President Recep Tayyip Erdoğan and published in the Official Gazette on Wednesday, Hürriyet newspaper reported. The tax on phones costing 640 liras to 1,500 liras was increased to 40 percent.

Hürriyet said the higher rate means a 2,000-lira phone will now cost 3,894 liras, including sales taxes and a registration charge, equating to a 650-lira increase.

The iPhone XS Max with 512 GB will be priced at 16,073 liras ($2,700), increasing from 13,999 liras, Hürriyet said. That equates to almost eight times the net minimum monthly wage of 2,020 liras. The phone costs $1,449 in the United States and 1,649 euros ($1,846) in Germany.

Turkey is increasing the taxes after the budget deficit widened, causing concern among analysts who say the government should take measures to help curb the lira’s recent losses against major currencies and slow inflation of 19.7 percent.

The 64 GB iPhone XS, which previously cost 9,899 liras, will now be priced at 11,400 liras, Hürriyet said.

The tax on more expensive cigarettes was increased to 86 percent from 67 percent.