Turkiye: Unscheduled Increase of Special Consumption Tax of Distilled Spritis

On December 25, 2024, Türkiye unexpectedly increased the Special Consumption Tax (SCT) on distilled spirits by 12.5 percent, excluding domestically produced raki. This irregular hike, outside the usual biannual adjustments, mainly targeted imported spirits. On January 3, 2025, an automatic SCT increase of 7.56 percent was triggered by the domestic Producer Price Index (PPI) inflation, compounding the total tax increase over a two-week period to 21 percent for most imported distilled spirits, while raki saw only the 7.56 percent rise. U.S.-origin hard liquors face an additional 70 percent retaliatory tariff, further burdening U.S. exporters and Turkish consumers. High SCT rates have led to increased consumption of illegal, counterfeit alcoholic beverages, posing health risks and causing several deaths recently. Critics argue that the government uses the SCT to attempt to influence consumer behavior, though there has been little impact to alcohol consumption rates in Türkiye.