Turkish media reported that, following a visit by members of Turkey's Retailers Federation (TRF) to Ankara on March 24, the Customs and Trade Ministry started working to reduce the 8 percent value added tax (VAT) to 1 percent, which is implemented on the retail sales of fruits and vegetables. It was then reported that Mustafa Altunbilek, the president of the TRF, met with Minister of Customs and Trade, Bülent Tüfenkci, and the reduction resulted.
However, the Ministry has released a statement saying that this is false; they verified Altunbilek's demand but said that if the TRF wishes to see the VAT reduced to 1 percent, they should discuss the issue with the Ministry of Finance.
Reports allege Tüfenkci criticized high food prices in Turkey, saying, "A 500-percent-profit is not rational." Asked about this by journalists, Altunbilek said that the Ministry demonstrated that the high prices were due to the marketplace purchase and sale prices. Altunbilek indicated commissions were responsible for high food prices, saying: "Before the product reaches [retailers], it has already changed hands of one or two commissioners. This increases the cost of the product by as much as 15 percent. When we brought this up to the minister, he told us he was aware of the situation, and a change could be made in the Marketplace Act."
Altunbilek noted the best way to bring down prices, for fruits and vegetables as well as red meat, is to lower the VAT to 1 percent. He pointed out that retailers buy goods with 1 percent VAT, even though retail sale of the goods charges an 8 percent VAT. He added if the VAT implemented in retail sales decreases, this will directly be reflected in food prices.
