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Turkey Internet Tax
Online gambling may be illegal in Turkey, but the parallel and very popular entertainment of Internet gaming is tempting Turkish officials to try and raise taxes from the pastime.
Zaman Istanbul reported this week that the Telecommunications Directorate (TiB) has proposed to the Ministry of Finance that a tax on Internet gaming be introduced. The head of TiB, Fethi Şimşek, said his agency has been watching the online gaming sector closely and has decided to warn the ministry that a tax is necessary after "...noticing many irregularities in the sector."
Prompted by TiB and the Interior Ministry, the Ministry of Finance has already banned the use of a game titled "Knight" at Internet cafés in Turkey, triggering an appeal against the government's action by the host company, K2Network Inc.
Şimşek pointed to the large profit that the company made in its Turkish operations, which brought in more than $1 million a month last year. He said the company had increased its Turkish profits from close to $4 million in 2006 to about $9 million in 2007.
"There are thousands of people becoming addicted to games, and companies are earning profits without being taxed," he told the Anatolia news agency.
Şimşek said the game has been popular in Turkey but even though it is now banned at Internet cafes, it is still being played and no taxes apply.
Taking an opposing view is the All Internet Houses Association's (TİEV) Yusuf Andiç. He said demanding a tax on such games is a "good move," but that the banning of the 'Knight' game is "questionable." He added that 60 percent of Internet gaming takes place in homes.
Internet games are often appealing to and target young people between the ages of 13 and 20. The sector has become even more lucrative in countries such as Turkey because of the demographics of its population.
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