The VAT rate charged on goods and services rose to 20% from 18%, while that on basic goods such as toilet paper and detergents increased to 10% from 8%, effective immediately, the Official Gazette said.
"Reducing the budget deficit is the aim of the latest increase in taxes and fees, and some other steps to ensure fiscal discipline are on the agenda too.
The tax increases could raise Turkey's budget revenues by around 2%, Oyak Investment said in a note.
Economists said the increased VAT rate charged on goods and services would boost state revenues by around 30 billion lira.
Separately, Turkey on Friday also exempted from witholding tax the dividend payments of own shares purchased by companies listed on the Istanbul bourse.
Persons:
Tayyip Erdogan, QNB Finansbank, Erdogan, Economists, Ezgi Erkoyun, Burcu Karakas, Orhan Coskun, Jonathan Spicer, Gareth Jones
Organizations:
stoke, Official Gazette, Bank Insurance, Oyak Investment, Istanbul bourse, Thomson
Locations:
ISTANBUL, Turkey, Istanbul