KABUL - The Ministry of Finance said that broadening the tax net could be an important step toward financial self-sufficiency for Afghanistan, indicating that a large number of taxpayers evade taxes or don't pay taxes on time.
"We are endeavoring to make grounds for more tax payments and encourage taxpayers to pay their taxes on time," said Ahmad Shah Zamanzai, head of the ministry's General Revenues Department.
But a number of individuals and foreign companies, especially some US military contractors, are exempt from taxes. The government is trying to abolish those exemptions to increase tax revenues.
"We are endeavoring to remove these exemptions, as these incomes could increase our revenues. We have [already] made some progress in this regard," Zamanzai said.
The ministry classifies business into three categories of large, medium and small enterprises for tax purposes. There are currently 400 large, 12,000 medium, and 20,000 small companies in Kabul alone.
The tax law has set income tax rates between two to 20 percent, and sales tax rates of two, five, and 10 percent. Income taxes are two percent for salaries between $200 to $250, ten percent for salaries between $250 to $2,000, and 20 percent for salaries over $ 2,000 per month.
According to the Ministry of Finance, the biggest challenges to tax collection are insecurity, a lack of sufficient capacity for tax collection and tax evasion.
Independent analysts also point to other problems such as corruption inside tax offices and bribes by taxpayers to reduce tax payments. (Tolo News)