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Pro-Erdoğan businessman who donated $164 mln for quake relief granted sizable incentives

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The Turkish government has provided several incentives to the pro-government Cengiz Holding, which donated TL 3.1 billion ($164 million) for relief efforts following a massive earthquake that hit southeastern Turkey on Feb. 6, including a 100 percent tax reduction, local media reported on Thursday.

Cengiz Holding Chair Mehmet Cengiz is among five businessmen who are referred to by Turkey’s opposition parties as the “gang of five” for having won nearly all the large tenders during the time in office of President Recep Tayyip Erdoğan.

The company on Wednesday donated $164 million to those affected by the earthquake during a fundraising campaign jointly broadcast by eight television stations in Turkey.

According to a presidential decree published in the Official Gazette on Thursday, the holding will benefit from incentives such as an exemption from income tax, an exemption from the requirement to pay duty at customs, TL 75 million ($3.9 million) in support for the employment of qualified personnel and assistance with energy costs of not more than TL 200 million ($10.6 million).

The presidential decree granting the incentives to the firm within the scope of an investment project in central Konya province was issued on Wednesday.

Academic Can Gürses said in a tweet that he doesn’t know which is more interesting, that Cengiz Holding was granted the incentives before it made a donation for earthquake relief or that the government announced the incentives after the donation was made.

The Justice and Development Party (AKP) government guarantees net income to the companies that win tenders for such large projects as the construction of city hospitals, highways, bridges and airports. If the firm’s revenue from such a project is less than the guaranteed figure, the shortfall is paid by the Treasury.

Opponents accuse Erdoğan of pursuing vanity projects that fill the coffers of pro-government companies while putting the government into deep and largely unnecessary debt, hence wasting taxpayers’ money.

The companies that comprise the gang of five were 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, according to World Bank data. The opposition parties accuse them of rigging tenders and claim they are Turkey’s biggest tax evaders.

A 7.8-magnitude quake that struck near the city of Gaziantep as people slept claimed the lives of more than 36,000 people and injured over 108,000 across 10 southeastern provinces hit hardest by the disaster, according to the latest official figures. It was followed by thousands of aftershocks, including a 7.5- magnitude temblor that struck the region later the same day.

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