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This paper examines the impact of the recent high taxation policy on Anatolian wine production as well as the value added loss from the use of grapes for non-wine consumption. The results clearly indicate that the high taxation policy is significantly reducing the wine production in Turkey. The suggested policy option of increasing the wine production may create six times more revenue than the existing policy outcome. A possible feasible policy is to remove the lump sum tax from exports and encourage export-oriented ‘Anatolian Old World’ wine.


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