Tax harmonisation in Turkey achieved
Dr. Chris Kauer
22 May 2018
It may have been a long time in coming but finally, in early
May, excise taxes for spirits in Turkey were harmonised. The same
duty rate now applies to the Turkish national spirit raki as to
The abolition of the long-standing tax discrimination against
Scotch Whisky is of course welcome news!
For a long time a three-tiered excise system put Scotch Whisky
and a number of other, mainly imported spirits in the highest tax
category, gin and vodka in the middle category, and raki in the
lowest - despite the fact that they are all spirit drinks and as
such in direct competition with each other in the market place.
In 2009 Turkey and the EU had agreed on an "Action Plan" for the
gradual equalisation of excise rates for all spirit drinks.
Significant steps were taken in 2012 and 2015, and as of May 2018
the same excise rate is applicable to both raki and Scotch
The SWA has consistently campaigned for the removal of
discriminatory taxation and continues to do so. It is good to see
that this has now been achieved in Turkey.
Regrettably, however, preferential tax treatment for certain
types of spirits, usually a country's national drink or local
spirit, persists elsewhere - despite clear EU and WTO rules and
jurisprudence against discriminatory taxation within the spirits
category. Case studies can be found around the globe.
In Europe, for example, there is Serbia where Scotch Whisky pays
2.5 times more excise tax than the local spirit rakija. In Greece
illegal tax preferences for the domestic products tsikoudia and
tsipouro exist. The Commission has referred the Greek Government to
the Court of Justice of the European Union, the case is pending.
Hungary's preferential treatment of its local spirit palinka is
another case where action is being taken against the blatant
discrimination against Scotch Whisky and other imported
The SWA will continue to fight tax discrimination where it
exists in Scotch Whisky's many export markets. Our aim is to
prevent distortion in the market, ensure a level playing field and,
ultimately, increase consumer choice.
Dr. Chris Kauer is the SWA's Head of
Market Access (Europe & Africa)