ECONOMY

In Brief

Turkey ups several taxes to boost state revenues Turkey increased taxes on cars, cigarettes, gasoline and alcoholic drinks as the government seeks cash to reduce the 2010 budget deficit. The fixed tax charged on a packet of cigarettes rose by 29 percent to 2.65 liras ($1.80), on gasoline by 12 percent to 1.89 liras per liter, while charges on diesel, beer, spirits and other products were also raised, according to the Official Gazette. The tax on car sales will increase 3.3 percent, it said yesterday. The Finance Ministry expects revenue of between 5 billion liras and 5.5 billion liras from the new taxes, the ministry’s press office in Ankara said. The government is aiming for a gap of about 50 billion liras, and plans to reduce the budget deficit before interest payments to 0.3 percent of economic output next year, from a forecast 2.1 percent in 2009. «The government seems to be taking advantage of low elasticity in fuel demand and tobacco consumption to replace the lost income due to low tax collection,» said Tunc Yildirim, an analyst at the Istanbul-based Standard Unlu Securities. The tax increases strengthen expectations that Turkey is preparing to sign a loan accord with the International Monetary Fund, said Yarkin Cebeci, an economist at JPMorgan Chase & Co in Istanbul. The IMF, which has been in talks with Turkey on new loans since a previous accord expired in May last year, has pressed for reductions in the budget deficit. The tax increase on beer to 35 kurus per liter from 26 kurus may hurt sales at Anadolu Efes Biracilik & Malt Sanayii AS, the biggest Turkish brewer which also operates in Russia, said Istanbul-based Oyak Securities in an e-mailed note. (Bloomberg) Romanian shortfall widens to 6 percent of GDP Romania’s year-to-date budget deficit widened to 6 percent of gross domestic product in November as expenditure rose and revenue dropped. The gap, which widened from 5.2 percent of GDP in October, means the government is on track to meet its year-end target, the Finance Ministry said on its website on Thursday. Romania has agreed to limit its budget deficit to 7.3 percent of GDP this year to meet conditions of a $30 billion bailout loan led by the International Monetary Fund. The agreement also limits the 2010 budget deficit to a maximum of 5.9 percent. In the first 11 months of the year, state revenue fell 6 percent, led by a drop in the collection of taxes on corporate profits, value-added taxes and customs taxes because of the recession, the ministry said. At the same time, expenses rose 2.9 percent on the year as pension obligations drove up payments by 20 percent and costs to maintain the civil service increased 4.7 percent, it said. (Bloomberg) Weak dinar Serbia’s central bank sold 58.5 million euros ($83.7 million) for dinars on the local market on Thursday to support the currency and limit its fluctuations. The Belgrade-based bank acted to «prevent high volatility in the market,» according to a statement on the Narodna Banka Srbije’s website. It was the second time this year the bank moved to support the currency. (Bloomberg)