Turkey raises tax on TVs, digital products
According to press reports, Turkey's cabinet decided to raise TRT surcharge on TVs, radios, video and digital products to 16% from 10% in an attempt to compensate the loss of TRT, the state-owned TV channel. TRT reported that its loss figure jumped to TRY 126 million ($94million) in 2004 from TRY 23 million ($16.5 million) in 2003. TV manufacturers are likely to pass on the tax increase to product prices, as they have not raised prices for a long period of time. In that case, TV prices are expected to rise by around 5.5%. Since every producer will be confronted with the tax rise, the dynamics of competition in the domestic market will not change. Domestic financial analysts do not believe that a 5% price increase will have a downward effect on TV demand. Analysts also note that two of Turkey's largest TV producers, Beko and Vestel generate nearly 90% of their sales in export markets; therefore they should not be adversely affected.