On Sept. 8, the Finance Ministry levied a record $2.5 billion fine on Doğan after findings by investigations of inspectors disclosed that Doğan companies had concealed profits from share transfers among partner companies and had avoided paying corporate and value-added taxes (KDV) on revenue from the transfers. Following the hefty tax fine, Doğan newspapers and TV stations accused the Finance Ministry of targeting Doğan institutions. Claiming that the tax operations are politically motivated, Doğan media said freedom of the press was in danger in Turkey, also accusing Finance Ministry officials of discriminating against the group and assessing laws incorrectly. Analysts, however, argue that Doğan media is completely ignoring tax evasion and judging the Finance Ministry without analyzing the reasons behind the fine. The Finance Ministry said in a written statement that the tax audits were not only directed at Doğan companies but that the ministry has initiated audits on a number of other media groups.
These investigations are still in progress. Underlining that Finance Ministry operations concerning the Doğan group are not politically motivated, as claimed in some reports, the statement said ministry officials carry out audits in a fair and impartial manner, as required by law. “Inspired by a traditional understanding of doing their job fairly, Finance Ministry officials cannot be accused of any sort of irregularities. The Finance Ministry is only asking the company to repay the tax debts it failed to pay in the past. Any discrimination by the Finance Ministry against any company is out of the question.”
Stressed that the Finance Ministry is extremely uneasy with “ugly accusations” placed on tax auditors, the statement noted that no Finance Ministry audit is politically motivated. Underlining that tax laws do not allow any party to interfere in Finance Ministry operations, the ministry said it carries out tax operations independently. “There is a sum of tax debt that should have been paid long ago and Finance Ministry officials have found that the company failed to pay its tax debts. A group comprising five revenue inspectors carried out the audits on Doğan and this group put together a comprehensive report that was submitted to a commission which includes many officials, all competent in their fields. The commission then decided to issue the fine after assessing its content in line with the related regulations and similar applications in the past.”
The statement stressed that the fine was levied for tax evasion. “The company has the right to either offer collateral and seek conciliation for the tax fine or appeal to a court. We believe that the court will issue the right decision should the issue be taken to court,” the statement read. Government sources said last week that the tax authority was open to negotiating the tax fine with Doğan.
Noting that the parties levied with a fine could criticize the fine, the statement said: “However, this does not mean that these companies have the right to target the Finance Ministry and its officials with a systematic smear campaign carried out in the media.”
Underlining that a number of other tax audits of other media groups are also under way, the ministry statement said investigations do not target any group. “Some 40.6 percent of big taxpayers have been subject to tax audits thus far,” it said. Noting that the Finance Ministry is continuing its fight against unregistered companies, the statement said some of Turkey's large firms are also involved in tax evasion.
Reacting to claims that the fine on Doğan was the highest ever levied on a company in Turkey's history, the Finance Ministry statement said this was also not true. Asserting that the ministry could not make public the details of the tax investigation due to confidentiality requirements imposed by laws, the statement said the Finance Ministry is watching the related reports with deep concern. “We would like to remind all that these parties have the responsibility to prove that the claims they espouse are true. The Finance Ministry reserves the right to take legal action against all false accusations leveled at it.”
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