The Turkish parliament has recently halted discussions on a proposed defense tax that aims to bolster the country's arms industry amid escalating tensions in the Middle East, particularly due to the ongoing conflict in Gaza and Lebanon. The ruling Justice and Development Party (AKP) announced that the proposal would be reconsidered after the budget discussions next year, responding to public criticism and calls for banks to lower credit limits in light of rising inflation. Finance Minister Mehmet Simsek emphasized the necessity of enhancing Turkey's deterrence capabilities, citing the regional turmoil as a justification for the tax, which would impose an annual fee on credit card holders with high limits and additional charges on vehicle registrations and real estate purchases.
The proposed legislation comes at a time when Turkey's defense sector is experiencing significant growth, with defense companies signing contracts worth $10.2 billion in 2023 alone. Simsek noted that the government has increased its defense budget from 90 billion liras ($2.63 billion) to 165 billion liras ($4.82 billion) this year, with future investments planned for missile defense systems and other projects. Turkish President Recep Tayyip Erdogan has voiced strong opposition to Israel's military actions, suggesting that Turkey could be a potential target in the conflict, which further underscores the urgency of strengthening national defense.
