Thursday, September 11, 2008

Turkey to launch an investigation on steel price hikes


Price increases in iron and steel, the building blocks of the construction sector, have prompted Turkish finance Ministry to launch an investigation into the industry.
As per report, an inquiry into tax evasion and inventory auditing practices has been started following a preliminary report on the iron and steel sector prepared under the direction of Finance Minister Mr Kemal Unakıtan and the Revenue Collection Administration placed the iron and steel sector under scrutiny after prices tripled over the last three years.
GİB will examine the industrial process from production to consumption, and all the major manufacturers will be investigated. The preliminary report was also sent to auditors and comptrollers in the Finance Ministry. Investigators have so far decided to investigate 18 companies dealing with iron and steel products. Investigators are primarily going to look into whether the recent price increases are reflected in company records and tax assessments, and whether taxes are paid correctly and regularly. They may also conduct a count of physical inventories, if needed. The ministry intends to recoup revenue losses by identifying unregistered market transactions, using financial and bank accounts if needed. The whole market chain, from manufacturing to retailers, will be examined thoroughly, the ministry said.
High price increases in iron and steel have recently been subject to heated controversy between builders and producers in Turkey. The price for one ton of iron was YTL 620, including value added tax, at the beginning of 2006, but in August 2006 it reached YTL 930. In 2007, the prices remained stable, but exploded in 2008. In February 2008 one ton of iron was about YTL 1,000, but the price reached YTL 1,605 in April and YTL 1,960 in August. As Chinese demand slowed at the end of August prices decreased to YTL 1,300. The producers of iron and steel claim that iron prices are affected by international affairs and foreign currencies and maintain that they are not overcharging.

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