Antalya attracts tourists and traders

24 October 2005

Antalya, on Türkiye's Mediterranean coast, is a favourite holiday destination for Russians. About one third of Antalya's six million tourist arrivals come from this country. Many are traders in disguise and buy leather garments to sell on when they return to Russia. Despite the schemes (even laws) to rein in free wheeling excesses of the cross-border trade, there is a tacit understanding on both sides that Russians eschew officialdom, particularly invoices. Leather International paid a visit to the Leather Sector Foreign Trade Association in Istanbul (DSD) who have embraced the Global Refund System, a worldwide organisation refunding sales tax/vat on retail purchases at exit points. Having official receipts and invoices promotes legitimate trade and accurate statistical data. DSD's finance manager, their sales manager and their general manager, Ahmet Karahan, seemed committed to the concept. But the main customers are Russians who oppose officialdom; and Turks play it their way and about $1 billion of finished leather trade exits untaxed and unrecorded under the 'Special Invoice' classification. Tourist receipts account for another $1 billion. Unconfirmed rumours indicate that DSD may bow out of Global Refund business and their focus on leather is, in any case, minimal. All of DSD's business relates only to 'Special Invoice.' To skirt import regulations enacted mainly for airline passengers, overland transport in leathergoods is flourishing as never before. This contributes greatly to opaque trading models and is something Russia must address before its proposed WTO membership. Of late, many check points on road routes to Russia are demanding a 'cut' in transit fees from overland and TIR carriers even before goods reach the final destination. For one Turkish owner of a tannery in Russia, this delayed a chemical shipment for more than three weeks. The manifest stated clearly that Russian final-destination import taxes had been paid. Three Turkish shoe companies with large client bases in Russia recently decided that import duties on raw materials (and some less raw) to this country are so high that they will manufacture in Russia, not Türkiye.

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