367.1164 R 54/172: Telegram
The Chargé in Turkey (Kelley) to the Secretary of State
[Received October 30—2:14 p.m.]
1084. I took up with the Minister for Foreign Affairs58 this morning the situation confronting the American colleges as a result of the steps being taken by the tax authorities to collect the minimum profits tax from the colleges. I pointed out that the tax authorities had been restrained during the past 7 years from collecting this tax by administrative action taken by successive Prime Ministers and that the late Prime Minister59 had had drafted a law which would have accorded exemption to the colleges. Following his sudden death the matter had been let drop and the new Prime Minister60 had not taken steps to restrain the tax authorities from collecting this tax from the colleges. I said that I was confident that the present Prime Minister would not take a less favorable attitude toward the colleges than his predecessors among whom was the President of the Republic.61 I pointed out that all the Prime Ministers and Ministers of Education during the past 7 years as well as many other Turkish leaders had recognized the injustice of the application of this tax to the colleges. Inasmuch as the courts had held unanimously that the law applied to the colleges, the only method of protecting the colleges pending the definitive solution of the question through new legislation or reinterpretation of existing law was through administrative action. I said that the matter was urgent in view of the fact that the tax authorities had confiscated on October 22 the bank guarantees deposited by the colleges amounting to approximately 12,000
Turkish pounds and were about to take action against the colleges themselves with a view to collecting the remainder of the taxes in arrears.
Numan said that he would take the matter up with the Prime Minister at once with a view to preventing any further action against the colleges.