As we enter this summer season, in the run-up to both Ramadan and the holiday that comes after it, it may surprise some to hear that, in fact, tax auditing becomes more intense during this period. I suppose many readers may have a better grasp of this subject -- and the news about new, urgent audits -- after having read stories about it in this newspaper. We are now all aware of the plans under way to close many schools both within Turkey and abroad, for example. As you may well guess, there is, of course, an economic aspect to these plans. And in fact, steps have already been taken in accordance with a report issued by intelligence units whose time has been completely allocated to collecting information about the Hizmet movement for the past five to six months.
Last week, the Finance Ministry's tax inspectors began examining the records of companies that appear on lists prepared some months ago. The most notable characteristic shared by many of the companies that appear on these lists is that they either belong to Hizmet members or have close relations with companies that do. In particular, it is notable that government put many companies that belong to the Hizmet movement on the audit list to see what their annual turnover or work volume is, or whether they had been audited or not in the past. For example, even companies that are companies in name only and have made no sales or purchases at all in the past three or four years were put on the audit list, simply because of close relations between company owners/partners and the Hizmet movement. This is the clearest indicator of just how one-sided, political and ultimately mistaken this entire selection process was. And thus, government tax auditors and inspectors who, in fact, have some very real, pressing cases to deal with, are being forced to fill their time with utterly useless pursuits such as these.
Another strange aspect to the companies being audited is that some of the companies are being pushed into audits under the guise of it being “risk analysis.” Companies that are trusted and which file their tax returns in complete accordance with the law are being audited without there being any concrete evidence pointing to why they should be. A really interesting point in these audits is that sworn financial consultants and independent auditing companies are also being put on audit lists. And so it is that auditing firms that pay their taxes, that are in communication with the tax department and whose payments can even be tracked online are being audited due to their close relations with certain circles. What's more, orders are coming down that these companies are to be audited immediately. In fact, there is constant pressure being placed on tax inspectors on this topic. Not only that, but the timing of the audits of these companies is quite unusual in the business world. The auditors are scrutinizing 2014 records, rather than those of the recent past. The calculation here is not only to scare the owners of these companies, but also to reap the benefits of any possible increases in the company's value.
The attempt to employ tax auditing in such a useless, fruitless manner in a country where unrecorded, unregistered business is high and where some companies receive false tax credits or use fake receipts to make false tax claims, and where there are now countless industrialists and investors that need to be audited, is nothing other than a betrayal. And while, on the one hand, there is a declaration of the rights of those liable, and promises were made that those liable for taxation will be treated with objectivity and equality, on the other hand, we have public workers engaged in these sorts of pointless endeavors, creating a deep contradiction.
A new poll tax?
This sort of intensely subjective selection of those to be audited for taxation purposes reminds me somewhat of the poll tax of eras past, which was, in fact, a dark stain on our history. As many already know, during the single party era, on Nov. 11, 1942, a new poll tax law was introduced, targeting non-Muslim business interests in particular throughout Turkey. The implementation of this new tax lasted one-and-a-half years. And though many of the non-Muslims targeted in this new law wound up selling all their holdings and possessions, they were still presented with taxes so heavy there was no way they could pay.
Many of the non-Muslims caught in the sights of this new poll tax wound up having to sell their homes and businesses and many of them saw the end of their business lives in the process, all in the name of paying these taxes. Some of those who weren't able to pay these new taxes were sent to labor camps. It was an enormous tragedy.
The policy being set forth by the current government employing auditing and supervisory groups is reminiscent of the poll tax of that bygone era. At the same time, this is a government that sees no problem with allowing business interests it perceives as close to it to win important tenders. For example, there are companies that have been granted tenders worth millions and millions of dollars, yet despite this, the government does not allow auditing of their actions to occur. In the event that some of these companies actually wind up being audited, heavy pressure is placed on the tax inspectors not to present them with a large tax bill.
When in fact tax liens are placed on companies close to the government, despite all attempts to prevent this from happening, somehow these taxes wind up being completely forgiven through some sort of centrally controlled compromise mechanisms!
On the other hand, as was clear from the example involving former Turkish Industrialists and Businessmen's Association (TÜSİAD) head Muharrem Yılmaz -- or any business figure speaking out against the government -- when this happens, such figures are caught in the pincers of all possible organizations, from public banks to the Capital Markets Board (SPK), from the Treasury to the Social Security Institution (SGK). And in fact, the bills presented to these business figures are so heavy that even if they were to sell all their worldly possessions and holdings, there would be no way to pay these sums.
The government now appears to be embracing plans that resemble the former plans of the Ergenekon suspects from whom they are awaiting thanks at this moment. And now, the government deems it fitting to treat conservative factions that once gave significant support to this government so tyrannically that it makes the way factions labeled “green capital” were treated during the Feb. 28 coup period pale in comparison. In any case, those companies liable for taxes who find themselves in this situation now need to remember that this is no longer the Turkey of the 1940s! Every action taken by the government can now be brought to court, and this, of course, includes unfair and illegal taxation.
*Yusuf Keleş is a columnist for the Zaman daily.
Published on Today's Zaman, 25 June 2014, Wednesday