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Minister Şimşek denies plan to remove ÖTV on cell phones

11 March 2012, Sunday / SELÇUK KAPUCI
Finance Minister Mehmet Şimşek has said the government is not working on a plan to eliminate the private consumption tax (ÖTV) on cell phones, denying earlier reports.

Speaking to reporters following a meeting he attended in Ankara on Saturday, Şimşek said the ÖTV rate can be scrapped on cell phones only when the government has a comfortable general budget. “There is only one thing the [finance] ministry is currently working on and it is not cell phones but diversifying or completely removing taxes on their SIM cards,” he said.

Transport and Communications Minister Binali Yıldırım had announced on Thursday that the government is working toward removing the ÖTV on cell phones.

The government raised the ÖTV, mostly for imported products such as cars, mobile phones, alcoholic beverages and tobacco, in October of last year. The central bank's monetary expertise coupled with the government's strict tax policy give consumers an incentive to prefer domestic goods over foreign ones, particularly when it comes to cars and cell phones.

Consumers are particularly angry about the existence of high indirect taxes such as the value-added tax (KDV) and the ÖTV. The government is, however, maintaining that it has gradually reduced the tax burden on citizens ever since it first came to power in late 2002.

Taxes imposed on corporations were reduced to 20 percent, and income tax was cut from 12.8 percent in 2002 to between zero and 5.3 percent for people who earn minimum wage. The KDV on the textile, tourism, health and education sectors was also slashed from 18 percent in 2002 to the present 8 percent.

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