Erdogan had to postpone additional taxes for air defense system project after public outrage

Levent Kenez/Stockholm

The Turkish government had planned to present a new bill to parliament that would have imposed an annual Defense Industry Fund levy of 750 TL ($22) for people with a card limit of 100,000 TL ($2,923) or more. The proposal, which sparked significant public backlash, was announced Tuesday as having been postponed until 2025.

The ruling Justice and Development Party (AKP) is expected to make changes during the parliamentary committee stage, including raising the credit limit threshold.

Many credit card holders had already contacted their banks to reduce their card limits below the TL 100,000 mark, a move widely seen as a sign of growing distrust in the government. This collective reaction is believed to have influenced the decision to delay the proposal.

There are currently 126,450,000 active credit cards in Türkiye, of which 17.5 million have limits above 100,000 TL. The government expects additional revenue of around 13 billion TL ($380 million) from this measure.

In a live broadcast on Tuesday morning, Finance Minister Mehmet Imek stressed that Turkey is in a difficult region and needs to strengthen its deterrence capabilities. imek argued that additional funding was needed for defense industry projects, in particular for the construction of a new air defense system, called Steel Dome, and for the production of fifth generation aircraft .

Explaining that the tax levied on credit cards would be used only to finance defense initiatives, Imek said: “This is not a plan to reduce the budget deficit. Not a single cent will be paid into the general budget. The defense industry is crucial for us.

In 2011, when Imek was also finance minister, he had to admit that taxes collected to strengthen buildings in case of earthquakes were instead used for highway projects and new airports, which were then high-profile by the AKP.

Steel Dome, which Minister Imek says additional tax revenue will only fund, is a comprehensive “system of systems” that integrates various air defense technologies from major Turkish defense contractors such as Aselsan, Roketsan and MKE. The project aims to create a multi-level air defense network using advanced technologies, including artificial intelligence.

Key components include Aselsan's Korkut, Hisar-a+, Gkdemir and Siper systems, designed to protect against threats ranging from low-altitude missiles to high-altitude aircraft. Roketsan will supply systems such as the Alka laser weapon and the Bur mobile defense system, while TBTAK SAGE and MKE will focus on weapons research and development. The project aims to strengthen Turkey's defense capabilities and act as a deterrent against potential threats.

Nordic Monitor previously reported that the S-400 long-range missile system purchased from Russia was not part of the project. The exclusion of Turkey's advanced S-400 missiles from the new defense initiative highlights the ramifications of past crises with NATO and the United States. The move highlights the complex position Turkey finds itself in amid ongoing tensions over the acquisition of the Russian-made missile system.

Many people on social media have expressed great frustration over several issues, chief among them the non-deployment of the S-400 system, which cost a total of $2.5 billion, and the government's inability to predict that it could not be activated as a system. Member of NATO.

Earlier this year, funding transferred to the Defense Industry Fund from taxes on lotteries and horse racing was cut in half by a presidential executive order. Citizens expressed frustration over the reduction of around 33 billion TL, fearing that the burden of this reduction would be imposed on them.

People have also pointed out on social media that having a credit card limit is not the same as having money and that taxing based solely on the limit represents an unprecedented form of taxation.

Turkey's withdrawal from the F-35 project by the United States due to the acquisition of the S-400 system is another factor weighing on the budget. Many believe Turkey's lack of fifth-generation aircraft and its efforts to modernize its aging F-16s contradict President Recep Tayyip Erdogan's persistent emphasis on the need for the country to build a strong deterrent capability. . According to calculations According to the Presidential Investment Office in 2013, Turkey was expected to earn $12 billion as a partner and supplier of the F-35 project.

Another concern is growing corruption and tax waste. The luxurious lifestyle of Erdogan and his family is increasingly causing negative reactions in public opinion. Expensive trips abroad and the cancellation of tax debts of businessmen close to Erdogan have intensified backlash against additional taxes imposed by the government. In addition to the tax on credit card limits, the proposed bill includes new taxes on motorcycle sales, real estate transactions and wristwatches.

Seluk Bayraktar, Erdogan's son-in-law and owner of Baykar, which produces military drones, has been instrumental in decisions regarding Turkey's defense industry. His brother Haluk recently joined him on Forbes' list of billionaires, leading the public to criticize the new tax as a “son-in-law tax.” It is no secret that President Erdogan, his family members, and his associates profit enormously from defense industry sales and military goods.

Erdogan frequently asserts that Turkey must maintain its military strength. He recently claimed that Israel posed a military threat to Turkey and suggested that after Lebanon, Israel could also attack Turkey. Many believe Erdogan is using this claim as a pretext for upcoming taxes, arguing that the likelihood of Israel launching a military attack on Turkey is minimal.