Most foundations granted tax exemption under AKP rule are pro-gov’t: report

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The majority of the 105 foundations in Turkey that have been granted exemptions from taxes since 2002, when the ruling Justice and Development Party (AKP) came to power, are known for being close to the AKP government, Deutsche Welle Turkish service reported on Wednesday.

According to official data, there are a total of 294 tax-exempt foundations in Turkey, with 105 of them having received the status during the AKP’s 19-year rule.

The statement “Foundations can be exempted from tax by the decision of Council of Ministers, at the recommendation of the Finance Ministry,” in the general communiqué related to Law No 4962 on Granting Tax Exemptions to Foundations, was changed to “Foundations can be exempted from tax by the president,” in April 2021.

The Turkey Youth Foundation (TÜGVA), on whose advisory board Erdoğan’s son Bilal Erdoğan sits, and the Service for Youth and Education Foundation of Turkey (TÜRGEV), one of whose executives is Esra Albayrak — daughter of President Recep Tayyip Erdoğan and wife of former Finance Minister Berat Albayrak — are among the foundations that have been exempted from tax under AKP rule.

The Foundation for Political, Economic and Social Research (SETA), a pro-government Turkish think tank, in addition to the pro-AKP Albayrak Foundation and the Ensar Foundation, which came to public attention in March 2016 due to child abuse allegations, were also granted tax-exempt status in the same period.

Another foundation exempted from tax is the Sancaklar Foundation for Education, Health, Culture and Social Aid, one of whose founders, pro-government businessman Ethem Sancak, said — in reference to praise given to the Prophet Muhammad by his companion — “I would prefer the death of my father, mother, wife and children to yours” during a speech in 2015, while expressing his affection for President Erdoğan.

A man who has been working on laws and regulations on foundations and associations and using the alias Mr. Mustafa, because he doesn’t want to reveal his identity, told DW that foundations’ applications for tax exemption are rejected if they aren’t close to the AKP government, even if they meet the criteria for receiving the exemption by law.

None of the foundations for which Mr. Mustafa helped prepare the applications were able to receive tax exemptions, DW said, adding that he was convinced that a foundation in Turkey nowadays cannot receive tax-exempt status if it doesn’t have any connections to Erdoğan since many foundations with tax-exempt status have turned out to have a former AKP MP as a board member.

“Recently, the AKP [officials] had their friends and relatives establish foundations and granted tax exemption to them. They also employed many AKP supporters via a capital channel they created, making those people rich. And they then directed their money to the foundations,”  Ali Haydar Hakverdi, an MP from the main opposition Republican People’s Party (CHP), told DW, adding that the AKP wants to control the foundations’ financial activities.

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