Turks may be smoking their way out of crisis
Turks may be smoking their way out of the financial turmoil that has gripped the country, according to government data.
Tax revenues from sales of tobacco in Turkey are surging during the economic downturn, which economists fear could bring a deep recession. Ther lira has slumped about 35 percent against the dollar this year.
The jump in revenues in the first nine months to 85 percent of the government’s year-end target means the finance ministry will easily exceed its goal of 37.8 billion liras ($6.7 billion) for 2018.
The increase in revenue can’t be explained away by price increases – they’ve risen just 0.37 percent this year, according to Karar columnist Ibrahim Kahveci. That means a surge in consumption is most likely behind the rise, he said.
Tax returns from tobacco have climbed as Turkey’s economic troubles deepened. Monthly income was 3.4 billion liras in June, before a slide in the value of the lira gathered pace and raised fears of an economic crisis. Revenues climbed to 4 billion liras in August and 4.7 billion liras in September, Kahveci said.
Total revenue from taxes on tobacco may total 44.4 billion liras this year, so long as averages seen in the past three months are matched in the final quarter, Kahveci said.
The government's announcement last week of a 45.7 billion-lira target for tobacco tax revenue in 2019 had raised speculation in the Turkish press that price increases were on the way. But the revenue figures for this year tell a different story, Kahveci said.