Gov’t granted 128 permits for special tax exemptions to 5 construction companies in 10 years

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The Turkish Trade Ministry granted 128 permits for special tax exemptions to five construction companies in the span of 10 years, a written answer to a parliamentary question posed by an opposition lawmaker revealed on Dec. 18.

On Oct. 12, Ali Mahir Başarır, a deputy from the opposition Republican People’s Party (CHP), asked Trade Minister Ruhsar Pekcan how many times since 2011 the ministry had granted permits for exemption from taxes, duties and charges, known as VRHİBs, to five companies: Cengiz Construction, Limak Construction, Makyol Construction, Kolin Construction and Kalyon Construction.

VRHİBs are granted to Turkish-based companies that win a public tender in which at least one of the bidders is a foreign-based company, bylaws designed to boost local businesses against foreign competition stipulate. Başarır also asked whether any foreign companies had submitted bids in the tenders.

Pekcan said in his answer the companies in question had received VRHİBs on 128 occasions in the last 10 years, without giving any specific information as to the involvement of foreign-based companies in the public tenders to enable the issuance of the VRHİBs.

Başarır took Pekcan’s answer to Twitter on Thursday, saying, “I will follow up on which foreign companies bid in the 128 tenders and share it with the public.”

Başarır denounced what he called unnecessary tax exemptions granted to cronies while the people were trying to make ends meet.

According to Pekcan’s answer, in the span of 10 years, Cengiz Construction received 30 VRHİBs, Kolin got 36 and Makyol got 24, while Kalyon and Limak received 19 each.

“The government, which taxes citizens at every opportunity, zeroed out the taxes of ‘the gang of five’,” Başarır tweeted.

Although Makyol construction is not included, “the gang of five” the CHP deputy was referring to were five businessmen as well as their companies who have won nearly all the large tenders during the rule of Turkish President Recep Tayyip Erdoğan: Cengiz Holding Chair Mehmet Cengiz; Limak Holding CEO Nihat Özdemir; MNG Holding Chairman Mehmet Nazif Günal; Kolin Construction CEO Naci Koloğlu; and Kalyon Construction Chair Cemal Kalyoncu.

According to World Bank data, those five firms in Turkey are among the world’s top 10 private sponsors of public infrastructure projects by investment and region and by investment and primary sector for the years 1990 to 2020. The companies have won tenders valued at $30 billion for infrastructure projects in the last four years and constitutes 30 percent of all tenders held for government projects. The remainder of public tenders have been shared among 20,851 companies.

The opposition parties accuse the five businessmen of tender-rigging and claim they are Turkey’s biggest tax evaders.

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