Reduced consumption tax (OTV) rates on new cars, white good and other products were introduced in March this year as part of the Turkish Governments economic stimulus package.

The tax rates were set to last for three months and have now expired and rates have risen.

However, the Government has announced that the increases will be stepped.

The tax on cars with engines of 1.6 litres or less will rise from 18 percent to 27 percent. The original rate was 37%.

The tax on so called home appliances such as washing machines will increase from the temporary zero percent to 2.7 percent.

Computers (PC’s and laptops) and furniture will continue to be taxed at the reduced rate of 8 percent. That was previously 18 percent.

The lower rates will apply until September 30th 2009.

But the sting in the tail of these measures will be felt by the smoker.

Taxes on tobacco products will for the second time this year rise.

The latest rise is aimed at offsetting some of the lost tax revenue from the tax cuts as well as helping to meet the Governments health agenda to reduce the number of smokers in Turkey.