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TURKEY SHOULD DUMP TAX FEUD LIKE ADULTERY LAW
Commentary by Celestine Bohlen
Bloomberg
http://www.bloomberg.com/apps/ne ws?pid=20601039&sid=aBvsnrEomxqM
Sept 22 2009
Sept. 22 (Bloomberg) -- Any business leader would shudder at a $2.5
billion tax fine. When penalties reach those levels, it's a safe bet
that more is going on than just tax delinquency.
This was true in Russia in 2003, when President Vladimir Putin
went after Mikhail Khodorkovsky's oil company, OAO Yukos, for $3.4
billion in unpaid taxes. Now a similar case, with a $2.5 billion tax
bill attached, has erupted in Turkey against a powerful media group
that owns more than half of the country's newspapers and two major
TV stations.
The stakes in this fight are huge, and not just for Aydin Dogan, the
group's 73-year-old owner. The whopping penalty looks, and feels,
like an assault on the freedom of the press. It is already said to
be having a chilling effect among other newspaper publishers and
journalists, and it has drawn international criticism at a crucial
moment in Turkey's effort to join the European Union.
Its origins appear to be both personal and political, and can be
traced to a long-running feud between Dogan and Prime Minister Recep
Tayyip Erdogan, whose party, in power since 2002, has pushed through
significant democratic change in Turkey.
As part of its pitch to Europe, Turkey needs to sell itself as a
fully functioning democracy, with a free and independent press. It
can't afford to fall into the Russian pattern, set by Putin months
after he took office in 2000, with an attack against the independent
Media-Most group, ostensibly for non- payment of past debts.
Back to Europe
The Turkish government's attack against the Dogan Yayin Holding AS
media company comes at a bad time. After having been distracted from
needed changes by a dramatic domestic political battle, Turkey has
been showing tentative signs of getting back on the Europe-bound track.
It has undertaken important diplomatic initiatives in its own
neighborhood, with overtures to Armenia and to Iraq, notably with
the opening of a consulate in Kurdistan, once considered enemy
territory. It has even sent signals suggesting it wants to help
solve the stalemate over Cyprus, a major roadblock in the Turkey-EU
relationship.
Of course, Turkey alone wasn't to blame for the deadlock with the
EU. Opposition to its membership, notably in France and Germany,
have fed what a group of senior European leaders, in a report issued
this month, called a "vicious circle." They recommended "deeper
convergence" between the EU and Turkey, partly as a way to encourage
Turkish democracy.
Attacking newspaper owners and intimidating journalists isn't the
way to go.
Murdoch of Turkey
Many observers hesitate to take sides in the nasty dispute between
Erdogan and Dogan, often called the Rupert Murdoch of Turkey. "It is
a domestic quarrel between two very powerful people, with a lot of
interests at stake," said Hugh Pope, who represents the International
Crisis Group in Istanbul.
The Turkish Finance Ministry insists that the $2.5 billion fine
against the Dogan Yayin media group was the result of an ordinary
everyday tax audit.
But Erdogan, a practicing Muslim, has made no secret of his
bitter feelings about the Dogan group, a pillar of Turkey's secular
establishment that has challenged the government with investigations
of sensitive political cases. The prime minister told supporters at a
campaign rally last February not to buy "newspapers that print lies,"
and warned Dogan that he could no longer throw his weight around as
he had with other prime ministers. "This prime minister is different,"
Erdogan shouted.
Vindictive Behavior
Since then, the government has stepped up its attacks. In February,
it sent a bill to the Dogan group for $592 million in back taxes and
fines, stemming from the sale of a 25 percent stake in its television
unit to Germany's Axel Springer AG. In April, it banned Dogan companies
from bidding on government contracts. Last week, it came up with a
new tax claim.
This kind of vindictive behavior fits with Erdogan's rough political
style, honed by fights with Turkey's secular elite and its powerful
military. It's not the first time he has gone too far: In 2004, he
alarmed Turkey's supporters in Europe by trying to pass a law that
would criminalize adultery. He dropped the idea, after being hit by
a wave of criticism at home and abroad.
Those kinds of reprimands will need to come pouring in from Europe's
capitals again to make the Turkish government understand the risks
of following Russia's example.
(Celestine Bohlen is a Bloomberg News columnist. The opinions expressed
are her own)
To contact the writer of this column: Celestine Bohlen in Paris at
[email protected]
From: Emil Lazarian | Ararat NewsPress
Commentary by Celestine Bohlen
Bloomberg
http://www.bloomberg.com/apps/ne ws?pid=20601039&sid=aBvsnrEomxqM
Sept 22 2009
Sept. 22 (Bloomberg) -- Any business leader would shudder at a $2.5
billion tax fine. When penalties reach those levels, it's a safe bet
that more is going on than just tax delinquency.
This was true in Russia in 2003, when President Vladimir Putin
went after Mikhail Khodorkovsky's oil company, OAO Yukos, for $3.4
billion in unpaid taxes. Now a similar case, with a $2.5 billion tax
bill attached, has erupted in Turkey against a powerful media group
that owns more than half of the country's newspapers and two major
TV stations.
The stakes in this fight are huge, and not just for Aydin Dogan, the
group's 73-year-old owner. The whopping penalty looks, and feels,
like an assault on the freedom of the press. It is already said to
be having a chilling effect among other newspaper publishers and
journalists, and it has drawn international criticism at a crucial
moment in Turkey's effort to join the European Union.
Its origins appear to be both personal and political, and can be
traced to a long-running feud between Dogan and Prime Minister Recep
Tayyip Erdogan, whose party, in power since 2002, has pushed through
significant democratic change in Turkey.
As part of its pitch to Europe, Turkey needs to sell itself as a
fully functioning democracy, with a free and independent press. It
can't afford to fall into the Russian pattern, set by Putin months
after he took office in 2000, with an attack against the independent
Media-Most group, ostensibly for non- payment of past debts.
Back to Europe
The Turkish government's attack against the Dogan Yayin Holding AS
media company comes at a bad time. After having been distracted from
needed changes by a dramatic domestic political battle, Turkey has
been showing tentative signs of getting back on the Europe-bound track.
It has undertaken important diplomatic initiatives in its own
neighborhood, with overtures to Armenia and to Iraq, notably with
the opening of a consulate in Kurdistan, once considered enemy
territory. It has even sent signals suggesting it wants to help
solve the stalemate over Cyprus, a major roadblock in the Turkey-EU
relationship.
Of course, Turkey alone wasn't to blame for the deadlock with the
EU. Opposition to its membership, notably in France and Germany,
have fed what a group of senior European leaders, in a report issued
this month, called a "vicious circle." They recommended "deeper
convergence" between the EU and Turkey, partly as a way to encourage
Turkish democracy.
Attacking newspaper owners and intimidating journalists isn't the
way to go.
Murdoch of Turkey
Many observers hesitate to take sides in the nasty dispute between
Erdogan and Dogan, often called the Rupert Murdoch of Turkey. "It is
a domestic quarrel between two very powerful people, with a lot of
interests at stake," said Hugh Pope, who represents the International
Crisis Group in Istanbul.
The Turkish Finance Ministry insists that the $2.5 billion fine
against the Dogan Yayin media group was the result of an ordinary
everyday tax audit.
But Erdogan, a practicing Muslim, has made no secret of his
bitter feelings about the Dogan group, a pillar of Turkey's secular
establishment that has challenged the government with investigations
of sensitive political cases. The prime minister told supporters at a
campaign rally last February not to buy "newspapers that print lies,"
and warned Dogan that he could no longer throw his weight around as
he had with other prime ministers. "This prime minister is different,"
Erdogan shouted.
Vindictive Behavior
Since then, the government has stepped up its attacks. In February,
it sent a bill to the Dogan group for $592 million in back taxes and
fines, stemming from the sale of a 25 percent stake in its television
unit to Germany's Axel Springer AG. In April, it banned Dogan companies
from bidding on government contracts. Last week, it came up with a
new tax claim.
This kind of vindictive behavior fits with Erdogan's rough political
style, honed by fights with Turkey's secular elite and its powerful
military. It's not the first time he has gone too far: In 2004, he
alarmed Turkey's supporters in Europe by trying to pass a law that
would criminalize adultery. He dropped the idea, after being hit by
a wave of criticism at home and abroad.
Those kinds of reprimands will need to come pouring in from Europe's
capitals again to make the Turkish government understand the risks
of following Russia's example.
(Celestine Bohlen is a Bloomberg News columnist. The opinions expressed
are her own)
To contact the writer of this column: Celestine Bohlen in Paris at
[email protected]
From: Emil Lazarian | Ararat NewsPress