Turkey Raises $1.5B from Conscription Plan

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Turkish authorities announced the government raised an additional $1.5 billion to fund procurement programs through a plan that exempts citizens from conscription for a fee.

Under the plan announced last year, about 200,000 Turks paid a lump sum of 18,000 Turkish lira (US $7,500) to exempt themselves from conscription.

Turkey requires every male citizen over the age of 20 to serve five to 12 months in the military, depending on his education. The deadline for the application and payment was Feb. 13.

That means Turkey raised an extra $1.5 billion to finance its procurement and modernization programs through the Defense Industry Support Fund.

Defense Minister Ismet Yilmaz said after the Feb. 13 deadline closed: "We did not expect that many applicants … This funding will go to the Defense Industry Support Fund to strengthen our armed forces and to increase our security forces' capabilities."

Turkey's procurement agency, the Undersecretariat for Defense Industries (SSM), collects annual receipts through the fund. It consists of revenues from levies and indirect taxes on alcohol, tobacco and gambling, and was widely speculated to amount to $1 billion annually.

Last year, the SSM said the revenues it collected from the Defense Industry Support Fund in 2013 totaled US $1.48 billion, much less than the all-time high of $2.9 billion in 2008.

More important, SSM said the fund's accrued but not yet collected revenues from the Treasury amounted to $5.7 billion at the end of 2013. The Treasury could pay that amount to the SSM in installments, or SSM could take payment in the form of Treasury backing for future loans.

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