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Turkey Hits Country's Largest Media Group with Hefty Tax Penalty

In Turkey, the country's largest media group has been hit with a $2.5-billion tax penalty. Since the group has been a strong critic of the government, concerns over the future of press freedom are growing - issues which could undermine Turkey's bid to join the European Union.

The tax penalty is the largest faced by any company in Turkey. It follows another $500 million penalty imposed in February on the Dogan Media group. The penalties come after the group published damaging allegations of government involvement in the defrauding of a German-based Turkish charity. Newspaper columnist Mehmet Ali Birand says such reporting could be a thing of the past.

"Its a big blow. Now I don't believe any newspaper or TV channel would dare to come out and criticize the government because of the fear of the finance ministry coming in and looking at their dossiers," Birand said.

But Prime Minister Recep Tayyip Erdogan denies accusations of political motivation behind the fines, saying the tax authority is independent. Referring to the earlier penalty, the deputy chairman of the ruling Justice and Development Party's parliamentary group, Nurettin Canikili, denied any political impropriety.

He said the investigation is completely subjective and fair, that there is no interference from the prime minister or government and that the tax office is completely independent from any political interference.

But such denials have been treated with deep skepticism in Turkey. The country's main business confederation, TUSIAD, in a statement issued on Friday, said suspicions about political interference in the fines against the media group lingered. A media scholar from Istanbul's Bilgi University, Haluk Sahin, says those fears are justified.

"When you place that particular penalty in the context of what has gone on, when you remember that the prime minister has gone from city to city asking people to boycott the papers published with this particular company.... One would have to be extremely naive not to see a political motivation behind something like this. There is a history of tax men being used as an agent of pressure against the free press in the rest of world as well as a particular company," Sahin said.

He is referring to Russia, where the country's largest company was bankrupted by tax penalties after its owner started to criticize the country's political leadership. Already parallels are being drawn in Turkey with what occurred in Russia. Worryingly for the government, the European Union is now voicing its concern. An EU spokesman warned that the fines could effect Turkey's membership progress report due next month. European Parliament member Richard Howitt says the controversy indicates the government has a long way to go in tolerating dissent.

"I still really worry about freedom of expression and the rights of independent associations to form and say unpopular things. And as part of being a modern European democratic and pluralistic country.... I still think that is a lesson [Turkey has to learn]. I still think we have a long way to go in the rest of the world as well as Turkey," Howitt said.

Turkish Foreign Minister Ahmet Davutoglu last week sought to limit growing international criticism, saying the government is committed to the freedom of the press. But with the huge tax penalties equal to the total value of the Dogan Media group, doubts are being raised about the company's future, with its shares falling nearly a third last week.