The Turkish government on Tuesday postponed until 2025 a parliamentary debate on a proposed tax on credit cards, which it sought to fund the arms industry as conflict rages in its neighborhood, in the wake of a public backlash, Agence France-Presse reported.
Indignant Turks, who already face double-digit inflation, called their banks to lower their credit card limits after the ruling Justice and Development Party (AKP) submitted the tax bill to parliament on Friday.
After the public outcry, the AKP announced Tuesday that it was delaying debate on the bill until next year.
“There were certain objections from our citizens, and we will examine all of this in detail,” said the AKP’s parliamentary group chairman, Abdullah Güler.
“We have postponed our discussions, and we will reconsider, after the budget, if there are some points to change or remove,” he said.
The proposed legislation came as Israel’s conflicts with Tehran-backed Islamist militants in Gaza and Lebanon, and missile strikes by Iran, have raised global concerns that a broader war could erupt in the Middle East.
“Our country has no choice but to increase its deterrent power. There’s war in our region right now. We are in a troubled neighborhood,” Finance Minister Mehmet Şimşek told private broadcaster NTV earlier on Tuesday.
The bill stipulated that people with a credit card limit of at least 100,000 liras (nearly $3,000) would have to pay an annual 750 lira ($22) in tax from January to bolster the defense industry.
“If we increase our deterrent power, then our ability to protect against fire in the region will increase,” Şimşek had said, though he added that the bill was in the hands of parliament and that the AKP could “re-evaluate” it.
When he proposed the tax on Friday, Güler said Israel’s next target would be Turkey, an argument often cited by President Recep Tayyip Erdoğan.
Weapons boost
A vocal critic of Israel’s offensive in Gaza and Lebanon, Erdoğan doubled down on the threat posed by Israel when addressing a conference hosted by his AKP party on Tuesday.
“Even if there are those who cannot see the danger approaching our country … we see the risk and are taking all kinds of measures,” he said.
Turkey’s defense industry has enjoyed a boom in recent years, but Şimşek said the sector still needed a boost.
The defense industry is planning to invest in 1,000 projects, including an air defense system that would protect Turkey from missile assaults, Şimşek said.
Turkey allocated 90 billion lira from the budget to fund the defense industry last year, he added.
“This year, we increased it to 165 billion lira. Maybe we will need to even double this.”
Turkey’s defense companies signed contracts in 2023 worth a total of $10.2 billion, according to Haluk Görgün, the head of Turkey’s Presidency of the Defense Industry (SSB).
The top 10 Turkish defense exporters contributed nearly 80 percent of total export revenue, he said.
Sales of Turkish Baykar drones, used in Nagorno-Karabakh and Ukraine, amounted to $1.8 billion.
‘Disguise the economic crisis’
Last week parliament held a closed-door session for the government to explain why it saw Israel as a potential threat, but the opposition said it was not convinced.
The spokesman for Turkey’s main opposition Republican People’s Party (CHP), Deniz Yücel, said Monday that the government was exploiting nationalist feelings to sweep an “economic crisis” under the carpet.
Inflation has spiraled over the past two years, peaking at an annual rate of 85.5 percent in October 2022.
Official data showed it had slowed to 49.4 percent in September.
“The AKP is trying to create a fake ‘foreign threat and war agenda’ with the rhetoric of ‘Israel may attack us’,” Yücel said.
“We know and see that they are trying to disguise the economic crisis they caused.”