In 2023 then eight of Turkey’s leading construction companies, which were awarded lucrative government contracts worth billions of Turkish Lira, paid no taxes, as reported by Uğur Zengin for Evrensel. These firms, heavily favoured by the government, benefit from tax exemptions, reductions and state-backed financial advantages, continuing a trend of wealth transfer through public tenders.
According to journalist Çiğdem Toker’s book “Ordinary Affairs in Public Tenders”, the top 20 companies received a total of 190.3 billion lira ($5.7 billion) in contracts via the “21/b procurement method”. This method, which accounts for over 77% of such tenders, is meant for urgent and exceptional situations but has been widely used for numerous projects even outside of such situations, in a process often lacking transparency.
Leading the list, construction company Taş Yapı secured 28.3 billion lira ($1.2 billion) in contracts over the past five years without paying any taxes. Similarly, companies Yapı ve Yapı İnşaat, Rec İnşaat, Özgün İnşaat, Söğüt İnşaat, and Özaltın İnşaat have also paid no taxes in recent years despite receiving substantial government contracts.
Even companies that did pay taxes made minimal contributions compared to their contract earnings. Construction company Kolin, for instance, paid taxes amounting to just 4.5% of their 22.1 billion lira ($650 million) contracts, while Gülermak’s tax contributions were a mere 0.4% of their earnings.
In addition then Cengiz Holding, a major beneficiary of public tenders, has been linked to offshore tax havens, using complex legal structures to avoid taxes. This has raised further concerns about the lack of transparency and fairness in the awarding of public contracts in Turkey.
Turkey’s Treasury and Finance Ministry has confirmed the headline report by Evrensel, revealing that an investigation into these companies has been initiated. They announced that among the 2,815 major taxpayers currently under review, 27% are being audited, prioritising those with persistent loss declarations deemed risky based on their size and industry.
