ISTANBUL Turkey's government, criticized for its failings indealing with last week's earthquake, proposed a "quake tax" Thursdayto pay for repairing the damage.
It was announced as a solidarity tax, but it only exacerbated thedeep divisions and resentment felt across the nation, particularly inthe northwest, which suffered worst of all.
Worried investors dumped shares in Turkish companies on Thursday,sending the stock market index plummeting about 10 percent on itsfirst day of trading since the Aug. 17 earthquake.
The coalition government of Prime Minister Bulent Ecevit proposedincreasing by 10 percent income and corporate taxes, doubling estatetax and vehicle levies, and imposing extra taxes on people earningmore than $35,000 a year. The value added tax, now 7 percent to 15percent, would increase by a percentage point.
Business leaders were highly critical of the proposed taxes, andformer Prime Minister Tansu Ciller, leader of the opposition TruePath Party, said: "The government, which was late with the reliefeffort, acted too early with the tax."
Financial experts said they expect the new taxes to help therecovery effort. They noted that Turkey also approved acontroversial measure to raise the retirement age from 45 to 58 forwomen and 50 to 60 for men, a belt-tightening move considered crucialfor securing loans from the International Monetary Fund.
"Taxes are always an ugly issue," said Tevfik Aksoy, chiefeconomist at Istanbul's Bank Ekspres. But he added that the taxeswould hurt mostly the wealthy and would help pave the way for an IMFdeal.
Meanwhile, the toll in the quake rose to 13,040 dead and 26,630injured Thursday. Thousands of people are believed still buriedunder the rubble.
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