Various aspects of the new tax package submitted to the Turkish Grand National Assembly are being discussed.
As you know, this package also includes tax increases for bosses who operate projects built under the Public-Private Partnership (PPP) model.
Corporate taxes collected from bosses running highway, bridge and tunnel projects and city hospitals built and operated under the PPP model will increase by five percentage points.
Once this law comes into force, profits made within the scope of PPP projects will be taxed at a rate of 30 percent instead of 25 percent. According to an impact analysis prepared and distributed for this tax regime, the Ministry of Finance expects to earn TL 557 million from this increase.
The assessment report for this article states that the company builds and operates highways, bridges, tunnels and city hospitals, and that the number of taxpayers subject to the tax is 44.
The 44 debtors mentioned consist of large contracting companies that are well known to the public.
If you recall, during the preparation of the savings circular package, there was criticism that there was no regulation on the astronomical amounts being paid out of the budget to the PPP bosses, that is, for these projects with revenue guarantees, passenger guarantees and vehicle guarantees.
Camel ears
The inclusion of provisions in this direction in the tax code means that these growing reactions have been taken into account. But don’t be misled – this is a “yes, we did it” kind of step. TL 557 million is not a very meaningful amount compared to the payments to those responsible for the PPP, which will be paid in foreign currency for many years to come. In fact, it can be said that it is only a matter of time.
The way to understand this is simple: look at the budget allocated to you.
* * *
Dear readers, I mentioned earlier: in the impact analysis prepared by the current ministry bureaucracy and sent to the Turkish Grand National Assembly, the number of parties (i.e. companies) obliged to construct and operate PPP projects was recorded as 44.
Make a note of this number.
Let us now recall the resources allocated in the 2024 budget for payments to operators of highways, bridges, tunnels and city hospitals.
A total of TL 162.4 billion.
Of this, 4.9 billion TL will go to the Eurasia Tunnel, 73.8 billion TL to highways and bridges, and 83.7 billion TL to city hospitals.
Let’s remember more: these amounts are just the initial payment amounts.
what do you mean?
Under the PPP Implementation Agreement, which we keep confidential as a trade secret, the guarantee is provided in foreign currency and will increase four times a year in response to changes in exchange rates and inflation.
So at the end of this year, we will learn, albeit tentatively, the following:
The total amount of guarantee fees, rent and service fees (rent and services for city hospitals) to be paid to 44 contracted companies by the Ministry of Transport, DHMI, Highways, Ministry of Health and other agencies will exceed the 162.4 billion TL set in the 2024 budget.
For a very simple reason: the exchange rate between the US dollar and the euro in October 2023, when this budget is drawn up, will not be the same as it will be in December 2024.
That aside…
1 in 291
If we take the amount that has not increased at all, i.e. the amount that was put in in its original form, and divide TL 162.4 billion by the expected tax amount of TL 557 million, the result is 291.5.
In other words, the tax revenue the country currently receives from increased corporate taxes received from PPP project contractors is 1/291 of the amount it promised to pay them in a year.
L think it is good?
The tolls people pay on toll highways and bridges are not real tolls, he says. Professor Ugur Emek has mentioned this often (it was also the subject of my articles in Cumhuriyet and Sözüç many years ago).
It is not the will of the companies that the toll, or the amount we pay, is set below the amount written in a secret agreement between the companies and the state.
This is done at the request of the government so that the public can pay to use the road, and then pay the difference to the company, which also comes from budgetary resources.
Therefore, it would not be wrong to say that the new tax measures will see some of the TL 557 million expected from the five-point increase in corporate tax on PPP companies being returned to PPP companies again in 2025.
Good luck.
Who is Sigdem Talker?
Cigdem Toker was born in Diyarbakir. He graduated from Denizli High School. He graduated from Ankara University Faculty of Law. He started journalism as a university student at Anka Agency. He did internships at Günaydin, Ankara Ulus newspaper and Nokta magazine.
He passed the Anadolu Agency exam (1988) and worked as a correspondent in the courts, the State Security Court (DGM) and the High Court. He was published in the weekly Economic Panorama magazine from 1990 to 1993. He then worked for 15 consecutive years as an economic correspondent in the Ankara bureau of the Hürriyet newspaper. Here he followed fiscal, tax, privatization, energy and competition policies. He reported on the economic crises of 1994 and 2001, relations with the IMF and the legislative process in the Turkish Grand National Assembly that was passed within the scope of the crisis. He followed as a reporter international conferences in which Turkey participated.
As the first Ankara representative of Habertürk newspaper, he established the newspaper’s Ankara office. He resigned and left. He published a series of articles on the OECD’s “Money Laundering in Football” report in the inaugural issue of the online newspaper T24. He voluntarily left Aksam newspaper, where he worked as a columnist and Ankara representative, during the seizure procedures by the Savings Deposit Insurance Fund (TMSF).
He worked as a columnist for Cumhuriyet newspaper from 2013 to 2018. He left voluntarily following a change in management at the Cumhuriyet Foundation, which owned the newspaper. His column for Soşçı newspaper, which he joined in 2018, was terminated in November 2022 due to “downsizing.” He appears as a commentator on the news program “Orta Saifah” broadcast on the FOX television channel.
Numerous lawsuits have been filed against him seeking astronomical amounts of moral damages for his articles which could be defined as critical financial journalism. He has been tried for articles on development news articles and faced prison sentences. Many of his articles on public tenders and companies have also had their access blocked by decisions of criminal justice judges of the peace.
Book
– My Name Has Grown With Me – Abdullatif Shenar, Doan Kitap, 2008
– Article contribution to the book “Public-Private Partnerships in Health in Turkey – City Hospitals”, Iletisim Yaynlar, 2018
– Business as Usual in Public Procurement – Tetsukin Publishing, 2019
Awards
– Most Successful Economic Journalist Award, Faculty of Economics, Istanbul University (1995)
– Saba Newspaper “Muammar Yashar Bostanci News Competition Grand Prize” (1997)
– The Turkish Agricultural Chambers Union’s Agriculture in the Press Award (2000)
– Milliyet Newspaper “Abdi İpekçi Peace and Friendship Award” – Interview with “Auntie Zehra from Takşiyarhiş” (2001)
– Turkish Journalists Association – TGC “Sedat Simavi Journalism Award” “Return of Evsil” file – (2005)
– Finalist for the European Press Awards “The Secret Money Mystery” and “Commentator Award” (2015)
– Community Center Press Award (2016)
– Transparency International Association Award (2016)
– Istanbul Medical Chamber “Health in the Press Award” (2016, 2018, 2019)
– Emre Madran Conservation Award, Ankara Branch of the TMMOB Chamber of Architects (2017, 2019)
– Eskisehir-Bilecik Medical Chamber “Public Health Award” (2017)
– ÇGD “Uğur Mumuk Investigative Journalism Award” (2017)
– ÇGD Bursa Branch “Professional Solidarity Award” (2018)
– Reporters Without Borders International Courage Award – Nominee list (2018)
– Sedat Simavi Journalism Award – “21/b Procedure in Public Procurement” File – (2018)
– Turkish University Women’s Association “Women’s Leadership Award” (2019)
・Fair Competition Contribution Award from the Competition Association (2019)
– Hasan Barukçi Honorary Award from the TMMOB Chamber of Electrical Engineers (2020)
– Community Center Solidarity Award (2020)
– Ankara Medical Chamber – “News revealing the political economy of city hospitals in all its realities and making their impact visible to the public and medical workers” (2021)
– TMMOB Chamber of Urban Planners – Urban Planning Press Awards (2021)
– Izmir Journalists Association “Hasan Tahsin Press Freedom Award” (2021)
– SES Equality and Solidarity Association “Women of the Year” Award (2021)
– Alanya Journalists Association – National Press Association Journalist of the Year Award (2021)
