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Turkey hikes tax on foreign currency purchases from 0.2 to 1 percent

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Turkey has hiked a tax on the buying of foreign currency to 1 percent from 0.2 percent in a move meant to curb fallout for the lira from the coronavirus pandemic, the country’s Official Gazette said, according to Reuters.

In the gazette announcement dated May 23 and effective immediately, the higher Bank Insurance and Transaction Tax (BSMV) would be applied to FX and gold purchases.

A tax of 0.1 percent was first applied in May of last year and was later raised to 0.2 percent as authorities sought to discourage a so-called dollarization trend of Turks buying dollars and other hard currencies.

The BSMV hike is the latest of several tax changes and regulations Ankara has adopted to stabilize the Turkish lira, which has fallen 13 percent so far this year and touched an all-time low against the dollar earlier this month.

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