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Independent research group faces tax audit for failing to declare 33 cents

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Turkey’s Finance Ministry has ordered a tax audit of an independent inflation research group whose findings anger the government for being much higher than official data on inflation on the grounds that the group has failed to declare income of TL 6 (33 cents), the group’s founder has announced.

Professor Veysel Ulusoy, founder of Turkey’s Inflation Research Group (ENAG), announced on Twitter on Sunday that the finance minister launched a tax audit of ENAG for failing to declare income of TL 6 after receiving an order to do so on the phone, implying that top government figures ordered Finance Minister Nureddin Nebati to audit the organization.

ENAG, which was established in İstanbul by a group of academics and researchers in 2020 to track inflation in the country, has gained prominence after the inflation figures found by the group differed significantly from the official inflation data announced by the Turkish Statistical Institute (TurkStat). ENAG’s inflation figures are sometimes twice as higher those announced by TurkStat. Hence, the group is accused by the government of playing with the inflation numbers to discredit TurkStat and paint a gloomy picture about the condition of the Turkish economy.

For example, the monthly inflation rate for July announced by ENAG in August was 176 percent compared to 79.6 percent announced by TurkStat for the same month, which was a fresh 24-year high level.

TurkStat has been receiving growing criticism from opposition parties and government skeptics for not releasing accurate figures for important statistics such as inflation and unemployment, instead presenting statistics that fail to reflect the market realities. The institute is accused of manipulating the numbers in order to mask the scale of the country’s economic deterioration.

In May 2021 TurkStat filed a criminal complaint on accusations of manipulating the country’s inflation figures based on the remarks of then-Finance Minister Lütfi Elvan.

A survey conducted by the Ankara-based MetroPoll showed in July that nearly half of ruling Justice and Development Party (AKP) supporters think the figures released by ENAG reveal Turkey’s actual inflation rate rather than those of the TurkStat.

According to the survey, 69 percent of respondents said it was 160 percent, the annual inflation figure announced by ENAG for May, while only 23.9 percent said it was 74 percent, the inflation rate announced by TurkStat for the same period.

Since April 2019 the head of the TurkStat has been replaced four times by President Recep Tayyip Erdoğan, leading to claims that Erdoğan was not pleased with the TurkStat figures when they were higher than his expectations.

Over the past several years, Turkey has been suffering from backsliding in its economy, with high inflation and unemployment as well as a poor human rights record. Erdoğan is criticized for mishandling the economy, emptying the state’s coffers and establishing one-man rule in the country where dissent is suppressed and opponents are jailed on politically motivated charges.

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