May 10 2018

Turkish capital repatriation amnesty sparks money-laundering fears

A tax amnesty announced by the Turkish government on bringing wealth earnt abroad into the country has given analysts cause to worry that it may be used for money laundering.

Unlike amnesties in 2008 and 2013, where the incoming wealth was taxed at 2 percent, no questions asked, this time the government says it intends to charge 3 percent on any untaxed funds coming in from overseas until the end of the year.

However, Finance Minister Naci Ağbal said that no tax would be charged on the money if it were brought back by July – no doubt with an eye on impending elections on June 24 – or if it were put to productive use.

But the move would open up the way for dirty money to flow into the country from all over the world, Pelin Ünker wrote in Cumhuriyet.

The Panama Papers and Paradise Papers, she said, showed that those with significant funds offshore standing to benefit include relatives of President Recep Tayyip Erdoğan and Prime Minister Binali Yıldırım.

Faiz Öztrak, a former head of the Turkish Treasury who is now a Republican People’s Party (CHP) parliamentarian, expressed similar concern.

“Which money launderers have you made promises to that you should try to make our country the world’s biggest dirty money laundering machine?” he asked on Twitter.

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