
Turkish publisher Aydin Dogan holds the Victoria award during a ceremony at the Publishers Night in Berlin Nov. 17, 2008. Dogan was awarded for his engagement in Germen Turkish integration. (Hannibal Hanschke/Reuters)
In Turkey, criticism an expensive business
Tax delinquent, or target of a government running scared? Dogan Media Group thinks the latter.
ISTANBUL, Turkey — Any normal business would tremble in the face of a $2.5 billion tax fine. But in the case of Dogan Yayin, Turkey’s largest media corporation, most are betting that more is going on than just a simple case of tax delinquency.
The powerful media group owns more than half of the country’s newspapers and two major TV stations, including CNN-Turk. Over the past several years they have emerged as the most vocal critics of the ruling Justice and Development Party (AKP) — making it all the more suspicious that the government has levied a tax penalty on the group equal to the value of the entire company.
On Nov. 24, Dogan Yayin will meet with Finance Ministry officials to discuss a possible settlement to the fine, which has raised concerns about freedom of the press in Turkey.
This week, in the face of the fine, Aydin Dogan announced the sale of five of his newspapers — Milliyet, Vatan, Posta, Radikal and Fanati — to Germany's Axel Springer, leaving the group with only the Hurriyet newspaper, alongside its television and other media interests.
The battle between Dogan Yayin and the Turkish authorities reached new heights this September when Dogan was notified that the fine, already record-breaking, had been increased to an astonishing $3.3 billion, leading many to argue that the government is now trying to literally tax the group to death.
As penalties mount, the case has increasingly drawn international criticism at a crucial moment in Turkey’s effort to join the European Union.
The fine comes just months after an initial $500 million tax penalty leveled against Dogan. According to Turkish tax officials, Dogan engaged in deceptive practices and failed to pay tax on income earned through the sale of a company and the transfer of shares between companies within the group itself. Then, in April, Ankara banned Dogan companies from bidding on government contracts.
Dogan Yayin, meanwhile, has accused the government of singling it out and twisting the country’s financial rules to suit its political purposes.
For many observers the whopping penalty looks, and feels, like an assault on the freedom of the press.
Thanks for your insight on what appears to be a clash of titans in Turkey. One point that perhaps could be the subject of supplemental reporting: is there any validity to the government's tax fine? More specifically: (a) is the fine supported by any competent evidence that the underlying fraud did, in fact occur? (b) are there any government tax regulations in place that prescribe or define the scope of fine to be levied in the event of tax fraud? and (c) is there a reasoned basis for defending the calculation of the governemnt's fine in this case? or alternatively, is there such a lack of nexus between the presumptive crime and the announced punishment that reasonable minds in Turkey only can conclude that the fine is a heavy-handed attempt by the government to muzzle opposition.
Your quotes from members of the press and groups advocating for free press rights are useful. In any follow-up piece, what do you think about including input from objective observers, e.g. tax attorneys or economists, who could shed light on the questions outlined above? An experienced Istanbul-based tax attorney or similar specialist might explain whether the charges against Dogan Yayin's media empire are legitimate, specious, or somewhere in between; that lawyer also might have insight into the (un)reasonableness of the government's fine. Similarly, an economist could address whether the fine really is likely to put the company out of business relative to the total assets of the media group, and the degree (if any) to which ill-gotten gains associated with the alleged fraud should be a part of the calculus.
Again, thanks for your input on a vital news subject -- not only from the vantage of press rights, but relative to Turkey and the pivotal role it plays in Euro-Middle East affairs. Given that the United States government is counting on Turkey as a strategic ally to help sort out difficulties in Iraq, Iran, Afghanistan, etc., Americans would do well to learn more about this extraordinary nation.
Keep up the great work!
-Richard Blau
Aydın Dogan is probably one of the most hated businessman in Turkey. Everyone knows He puts himself even before the government, the national assembly, and the public. He supported all military coups so far happened in Turkey, guess he is a Media Boss!
"Petrol Ofisi", one of his companies which is Ex- State Petrolium Delivery Company, smuggled millions of tons of petrolium products. His company illegally copied anti-smuggling chemical identification remark to use in his smuggled petrolium products. These are proven guilds in Turkish Courts.
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