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Today's Zaman

Telecommunications watchdog seeks tax on Internet gaming

13 January 2009, Tuesday /TODAY'S ZAMAN WITH WIRES
The Telecommunications Directorate (TİB) has applied to the Ministry of Finance for a tax on Internet gaming. The head of TİB, Fethi Şimşek, said his agency has been watching the online gaming sector closely and had decided to warn the ministry about the need for a tax after noticing many irregularities in the sector.

Prompted by TİB and the Interior Ministry, the Ministry of Finance yesterday banned the use of a game titled "Knight" at Internet cafés. The host company, K2Network Inc., immediately appealed the banning of its product in court. Şimşek pointed to the large profit that the company made in its Turkish operations, which brought in more than $1 million per month last year. He said the company had increased its Turkish profits from close to $4 million in 2006 to about $9 million in 2007.

"There are thousands of people becoming addicted to games and companies are earning profits without being taxed," he told the Anatolia news agency. Şimşek said the game has been popular in Turkey but even though it is now banned at Internet cafes, it is still being played and no taxes apply. But the ban on the game has been questioned by the All Internet Houses Association's (TİEV) Yusuf Andiç. He said demanding a tax on such games is a "good move," but that the banning of the game is "questionable." He added that 60 percent of Internet gaming takes place in homes.

Internet games are often appealing to and target young people between the ages of 13 and 20. The sector has become even more lucrative in countries such as Turkey because of the demographics of its population.

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