In certain other respects, however, the Bagdad Railway Convention was
radical and far-reaching in its innovations. Worthy of first mention
among its unusual provisions is the sweeping tax exemption granted
the concessionaires by _Article 8_: “Manufactured material for the
permanent way and materials, iron, wood, coal, engines, cars and
coaches, and other stores necessary for the initial establishment as
well as the enlargement and development of the railway and everything
pertaining thereto which the concessionaires shall purchase in the
empire or import from abroad shall be exempt from all domestic taxes
and customs duties. The exemption from customs duties shall also be
granted the coal necessary for the operation of the road, imported
abroad by the concessionaires, until the gross receipts of the line
and its branches reach 15,500 francs per kilometre. Likewise, during
the entire period of the concession the land, capital, and revenue of
the railway and everything appertaining thereto shall not be taxed;
neither shall any stamp duty be charged on the present Convention or
on the Specifications annexed thereto, the additional conventions,
or any subsequent instruments; nor on the issue of Government bonds;
nor on the amounts collected by the concessionaires on account of the
guarantee for working expenses; nor shall any duty be levied on their
stock, preferred stock and bonds, or on the bonds which the Imperial
Ottoman Government shall issue to the concessionaires.” Thus the Bagdad
Railway not only was assured of a subsidy constituting a preferred
claim on certain taxes collected from the Turkish peasantry, but, in
addition, was exempted from the payment of important contributions to
the national revenue. The extent to which such an arrangement would
confound confusion will be clear if one will recall that many other
restrictions on the collection and disbursement of public funds were
vested in the Ottoman Public Debt Administration.[52]
Incidental to the railway, the Bagdad Company was granted other
valuable concessions. The corporation was given permission to establish
and operate tile and brick works along the line of the railway. For the
direct and indirect use of the railway and its subsidiary enterprises
the Company was authorized to establish hydro-electric stations for the
generation of light and power. The erection of necessary warehouses
and depots was permitted as essential to the proper operation of
the railway. The Anatolian Railway was empowered to provide for
satisfactory ferry service between Constantinople and Haidar Pasha, in
order to insure direct sleeping-car service from Europe to Asia and to
provide other facilities for through traffic. All of these subsidiary
projects were to enjoy the same exemption from taxation as the railway
itself.[53]
Public-domain text, read in full here on John Shaqi.
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