The Taliban raise taxes on Afghans

But state leaders, the Taliban, limited by domestic revenue in their first annual budget, have found ways to raise even more funds from citizens.

To fund the budget, which is projected to reach $ 2.6 billion – the value of which has impressed experts – despite the $ 500 million deficit, the Taliban depend heavily on their already proven ability to raise taxes. and to increase exports of precious natural resources, such as coal.

The extremist group has said it has rooted out corruption in the tax collection process, but also in illegal mining and the export of natural resources. The Taliban have also reactivated an electronic system and suspended fines for late tax payments in order to ensure that citizens will pay.

“It’s a lot of money,” said William Byrd of the United States Institute of Peace. economic, which is heavy ”.

“I think in terms of government leadership, it is adequate,” he said, adding that “if that money is spent properly.”

Aside from claims that the funds will be generated by customs, taxes and mining, however, the Taliban have not yet provided details on where the money will come from or where it will be allocated.

One thing is for sure: Afghans can expect to pay more taxes on everything from transporting goods on the highway to selling them in stores. But the Taliban government’s lack of transparency and loss of essential services makes it difficult to see what citizens are getting in return.

Death, taxes and the Taliban

Foreign trade has plummeted dramatically since the Taliban took power in August, and foreign aid, once backing the Afghan economy, has waned, forcing the Taliban to fund the government themselves.

However, as he announced the Taliban’s first annual budget in May, Deputy Prime Minister Abdul Salam Hanafi forecast revenue of 186.7 billion afghanis (about $ 2.1 billion), while other officials were quoted as saying that corruption, which is mentioned as a contributing factor.

“The entire budget, including expenditures on education, health, development, defense and other sectors, will be financed from our national revenue sources without any foreign contribution,” Hanafi said, adding that the focus will be on providing education for children and that 27.9 billion afghanis ($ 30 million) will be spent on development projects, without specifying what the projects are.

Hanafi also did not say how Afghanistan’s projected deficit would be calculated.

The previous Western-backed government had a budget of about $ 6 billion in 2021, before the Taliban took power. That budget projected domestic revenue of 216.5 billion afghanis ($ 2.7 billion), but budget forecasts were hit by the coronavirus pandemic and huge military spending. Annual revenues would be higher ($ 3.3 billion) if foreign grants were included.

Just like the Taliban’s budget, in the past the budget was filled with domestic revenues from customs and taxes, where most of the budget was used to pay salaries and 35 percent went to infrastructure, agriculture and health.

But since the Taliban returned to power, government officials have reported being paid with difficulty, food and fuel prices have risen, and education and health care systems are crumbling. As the militant group introduces policies, implements them and raises taxes for all sectors, Afghans say they are gaining nothing as they increase calls for relief.

Earlier this month, the Taliban announced new tariffs on freight, which they said would add 30 billion afghanis ($ 341 million) to the Treasury. But drivers interviewed by Radio Free and Radio Free Europe / Radio Liberty said efforts to raise more money from drivers had already begun.

Omid, who often travels with his truck on the Kabul-Jalalabad highway to transport textiles, said the trip once cost him 70 afghanis ($ 0.80) to transport goods, but now the toll has tripled, which in combination with rising fuel prices, its revenues have shrunk.

He said he was lucky to have 300 or 400 Afghanis left at the end of the day ($ 3.4 to $ 4.5), adding: “Rest assured I did not win 3,000 or 4,000 Afghanis. [34 ose 45 dollarë]”Since the beginning of May.

In Kabul, shopkeepers have complained that local authorities have imposed a tax that was previously ignored.

Mohammadullah, who owns a grocery store in the Afghan capital, said officials had visited his shop and “measured the space and asked me for 12,000 afghanis per square meter” and told him that the law on such a tax was in force since from 2017.

Other Afghans have complained about the unpopular tax on telephone cards, which was outlawed in the previous government. Citizens are complaining that this tax is being applied despite the lack of proper telephone network coverage.

Massud, a citizen from Kabul who works for a government agency, told Radio Azadi that although he still expects to be paid for the work he does, he is being charged a 10 percent tax to add top-ups to his cell phone.

“I have not been paid for three months. “I am thinking about how I will pay the rent,” said Masud. “The government has to resolve the issue of the phone card tax because we currently cannot pay for them.”

The situation has worsened so much in the state media – as hundreds of media outlets have been shut down due to economic pressure and Taliban repression of dissent – that calls have been made for the media to be tax-exempt so that they can survive.

Although the Taliban authorities have pledged to find ways to reduce heating costs and provide more electricity to industries and large cities, they are increasing exports of an important natural resource they need for these efforts – coal – to help fund the budget.

The Taliban announced in May that they would increase coal exports to neighboring Pakistan as the extremist group aims to generate more revenue from the Afghan mining sector and wants to take advantage of record prices for coal sales. Global supplies have fallen due to Russia’s war in Ukraine and a halt to Indonesia’s exports, which is the world’s largest supplier of coal.

The Taliban reportedly collected more than $ 33 million in customs revenue in the last six months and increased coal exports to 1.8 million tonnes over the past year, or a 16 percent increase in exports.

To further increase the budget, the Taliban last month reportedly increased taxes on coal exports by 20 to 30 percent.

Most of the coal being exported to Pakistan comes mainly from 17 mines across Afghanistan, said Esmatullah Burhan, a spokesman for the Taliban’s Minister of Mines and Fuels.

Most of the coal is mined from artisanal mines, which have traditionally been seen as a major source of corruption, and there has also been widespread criticism that children are also used as labor in these mines.

“We allow every company to extract 2 tons of coal a day and they export it to Pakistan,” Buran said. “We export about 10 to 15 tons of coal a day.”

Byrd from the United States Institute of Peace, who has also been the manager for Afghanistan at the World Bank and later served as the country’s economic adviser, said Afghanistan’s coal resources are higher in quality than Pakistan’s and that coal exports are “a good trade opportunity for Afghanistan.”

The increase in exports means “a lot of trucks loaded with coal,” most of which go to Pakistan through the Tokham border crossing, Bryd said.

“And the more security there is in the Taliban power, the less there will be predatory checkpoints and bribery along transportation routes, and that probably helps mining and exports.”

However, he said that the revenue generated by royalties from coal mining is low and coal will not be a major contributor to the budget, and may even have a negative impact in the long run, as well as a negative impact on the environment.

“What could generate more revenue are big projects,” Byrd said, noting the development of the Mes Aynak copper project, which went “nowhere” in previous governments.

According to him, “some big neighbors like China or Russia may reach a point – especially China – to be willing to invest in big projects” in Afghanistan.

Byrd expressed his doubts about the Taliban’s funding for development projects, adding that the budget allocation for this “is too small”.

With so little time to finalize the details until the full budget is released by the Taliban, it is difficult to judge where the money will be taken to fill the budget and where it will be spent, Byrd said.

“The key to the budget is that there must be transparency,” he said. “And we need to know better about the Taliban’s spending plans so that the United Nations and the aid agencies of the NGO do not double those costs.”

top channel