No one enjoys paying taxes—whether they are among the wealthiest individuals or the most financially disadvantaged. However, like death, taxes are unavoidable, and some people face a heavier burden than others. A prime example is found in Turkey, where new cars are subject to the Special Consumption Tax (SCT), which varies based on engine size. As highlighted by Motor1, this explains the presence of models like the 1.5-liter Mercedes-Benz E180 and the 1.6-liter BMW 520i in the country. In contrast, the base engine for these models in the United States is a 2.0-liter turbo-four. In Turkey, opting for smaller engines allows buyers to pay a significantly lower SCT rate of just 80%.
Yes, you read that correctly—80%.
In Turkey, any vehicle costing more than roughly $6,100 (which applies to all new cars) incurs a standard SCT rate of 80%. If the engine size is kept below 1.6 liters, that’s all the SCT the buyer will face. However, choosing an engine larger than 2.0 liters results in a staggering 150% SCT, while V6 and V8 engines attract a jaw-dropping 220% SCT. This translates to significantly high prices for cars in Turkey.
This is precisely why you see small engines in large sedans like the E-Class and 5 Series.
Furthermore, this 80% SCT is applied before adding a 20% VAT on imports. So, how much can Turkish consumers expect to pay for a power-limited E-Class that offers 168 horsepower and 184 lb-ft of torque? Approximately $137,000. For comparison, in the U.S., a 2.0-liter E350 starts at $63,450. It’s clear that investing in comfortable walking shoes might be wise.
To provide some context, Turkey has experienced significant economic challenges since the 1980s and 1990s, including severe financial crises and natural disasters. As a result, the country’s economy has undergone substantial restructuring. Over the years, numerous indirect taxes have been eliminated or merged into value-added taxes (VAT), including the SCT. This tax, which applies to four primary product categories—one of which is vehicles—imposes a one-time fee upon purchase. Previously, vehicles were taxed based on their weight, but with the SCT replacing that system, new cars are now taxed according to their engine size.
One can only speculate how automakers would adapt if cars were taxed based on seating capacity instead.
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