Varlik Vergisi: The Wealth Tax Law of 1942

Originally published in Turkish on December 26, 2021, by Gazete Sabro. You can find the original here

By Tuma Çelik Syriac Member of Turkey’s Grand National Assembly

The Republic of Turkey arose as a transformation project of the collapsing Ottoman Empire into a “nation-state”, and all ruling parties and factions that came to power, including the founding cadres, at all times acted within the framework and logic of “Turkey belongs to the Turks”. The Wealth Tax law, passed in parliament on November 11, 1942, and immediately effective the following day, was implemented within this framework of ethno-nationalist ideology.

During and after his prime ministry (1942-1946), Mehmet Şükrü Saraçoğlu signed the German-Turkish Treaty of Friendship with the Nazi’s and allegedly tried to prevent those fleeing the Holocaust from traveling through Turkey, and allegedly caused the deaths of Jews in Struma, and he stated the following in defense of the Wealth Tax (Varlik Vergisi);

“We are Turks, we are Turkists and will always remain Turkists… For us, Turkism is a matter of blood as much as it is a matter of conscience and culture… This law is also a law of revolution. We have in our hands the opportunity that will give us our economic independence. Thanks to this law, we will abolish the minority merchant class that dominates the economy, and we will put the Turkish market in the hands of the Turks… The law will be implemented with all force.”*

In the summer of 1942, the summer before the Wealth Tax law was passed in parliament and which head of government Saraçoğlu justified in those confrontational words, hate speech in the press increased. News and articles about theft, the black market, usury, and profiteering appeared on the front pages of Istanbul’s newspapers. Cartoons of the “Black Market Jew” were published almost daily and in every newspaper. Hate speech against Christians (Greeks, Armenians, Syriacs, etc.) and Jews in newspapers and magazines became widespread day by day.

The Wealth Tax law was passed in the Grand National Assembly of Turkey on November 11 and came into effect after publication in the official state Gazette on November 12, 1942. Passed without any parliamentary debate, the law ordered the creation of wealth-assessment committees to determine who would pay how much tax in each city and district. The law also stated that the decisions of these committees were final. The law furthermore stipulated that the deadline for paying the assessed tax would be 15 days, that the properties of those who had not paid the accrued tax within 15 days would be seized and sold in foreclosures, and that the taxpayers who did not pay their debts within 1 month would be forced to work in general and municipal services according to their physical capacities.

In addition, defaulters were exposed and then deported to concentration camps, mainly to Erzurum-Aşkale. Among the 1,229 Wealth Tax defaulters who were deported to Erzurum-Aşkale, some lost their lives as a result of the hard physical work, poor work and living conditions, and inadequate medical care. Some of the survivors were put on transport to Eskişehir in August 1943. In December 1943, due to geopolitical developments and international pressure on Turkey, they were sent home on the eve of then-President İsmet İnönü’s visit to Cairo to meet US President Franklin Roosevelt and British Prime Minister Winston Churchill.

The swiftly introduced Wealth Tax was abolished with the Wealth Tax Abolition Law (Law No. 4530) of March 15, 1944. The same law also repealed taxes levied up to the aforementioned date but not collected.

After the introduction of the Wealth Tax, which Prime Minister Saraçoğlu so vehemently defended, thousands of non-Muslim properties changed hands in Istanbul, especially in Beyoğlu. 67% of these properties, sold through foreclosures to collect the imposed high tax debts, were bought by Muslim Turks and 30% by official government agencies. Thus, almost all property and wealth in Turkey changed hands while a new group of wealth holders was formed – the new Turkish bourgeoisie.

According to Istanbul Treasurer Faik Ökte, appointed on September 12, 1942, in his memoirs, TL 280 million (89%) of the TL 315 million collected wealth tax was paid by non-Muslims. In the officially released figures, 87% of accrued taxes were levied on non-Muslims, 7% on Muslim taxpayers and the remaining 6% on others, the majority of whom were non-Muslim minorities and foreigners.

While the Wealth Tax provided the Republic of Turkey with enormous economic revenues and changed the ownership of capital to Turks, its results became visible in many different areas while Turkey was purged of its non-Muslim minorities. In the 1935 census, i.e., before the Wealth Tax Law of 1942, the proportion of non-Muslim minorities to the entire Turkish population of 16,158,018 was 1.98% (about 320,000). This ratio decreased to 1.56% (about 290 thousand) in 1945 (18,790,174), and to 1.08% (about 250,000) in 1955 (24,064,763) due to the emigration that started after the introduction of the Wealth Tax law. During these intervals, the population of Turkey increased by 18%, 15%, and again by 15%, respectively.

Indeed, Turkey did not become the state it is as a result of the national struggle fought between 1920-23 but is the product of the transformation of the collapsing Ottoman Empire into a nation-state based on a Turkish-Islamic-Sunni identity. This ethno-religious transformation process already began in the early 1900s and continues to this day. Junction points are; 1915, 1923, 1924, 1938, 1942, 1955 and 1980.