Higher Public Lighting Deductions: An Additional Burden on Municipal Budgets
November 01, 2026
Higher municipal contributions to public lighting costs are increasing deductions from municipalities’ shares of general budget tax revenues.
Presidential Decision No. 11573, published in the Official Gazette on 9 August 2026, increased the contribution rate to 60% for municipalities within the metropolitan scope and 30% for other municipalities. The decision took effect retroactively from 1 January 2026.
Law No. 7590 amended Provisional Article 6 of Electricity Market Law No. 6446, raising the statutory rates from 10% to 30% and from 5% to 15%, respectively. Exercising the authority to double these rates, the President set them at 60% and 30%.
The rates previously applied were 20% and 10%. For a given amount of lighting expenditure, the new rates triple the municipal contribution, representing a 200% increase.
Although deductions are made from municipalities’ shares of general budget tax revenues, the 60% and 30% rates are calculated on the relevant lighting expenditure.
Our calculations using 2025 data indicate that the additional burden is equivalent to approximately 1.4% of total municipal expenditure, 7.3% of municipal investment expenditure and 20.1% of municipal tax revenues. The 20.1% figure is the estimated additional burden relative to municipal tax revenues.
Contribution Rates and Estimated Fiscal Impact
| Municipality group | Previous effective rate (%) | New effective rate (%) | Change (%) |
|---|---|---|---|
| Metropolitan municipalities | 20 | 60 | 200 |
| Other municipalities | 10 | 30 | 200 |
| TRY billion | Net impact of a 50% increase in the statutory rate | Impact of doubling the upper limit under presidential authority | Change (%) |
|---|---|---|---|
| 2025 impact analysis report* | 6.0 | 24.0 | 300 |
| At 2026 prices** | 6.6 | 26.4 | 300 |
* Planning and Budget Committee Report, July 2026.
** A 10.14% increase in public lighting electricity prices is assumed for 2026.
| Budget item | 2025 (TRY billion) | Impact if applied to the 2025 budget (%) |
|---|---|---|
| Municipal expenditure | 1,735 | 1.4 |
| Municipal investment expenditure | 331 | 7.3 |
| Municipal tax revenues | 119 | 20.1 |
These calculations indicate the potential scale of the burden in 2026. The actual impact will depend on lighting expenditure, electricity tariffs, and municipal revenue and expenditure levels.
The regulation reduces resources available for municipal services and investment while lowering the portion of public lighting costs financed by the central government budget. Where revenues and investment expenditure are declining in real terms, the additional burden will further constrain municipal fiscal space.