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Bribes to lower property rates and evade tax

Bribes to lower property rates and evade tax

Dec 21, 2013 - 10:45

KABULinfo-icon (PANinfo-icon/IMC): Sixty percent of property owners in Kabul do not pay the annual cleanliness tax to the municipality, reveals an investigation by the Independent Media Consortium (IMC) Productions.

The tax, which is calculated as a percentage of the value of the property, is a critical source of revenue to keep the city clean.

But investigation by IMC reveals corrupt civic officials collect huge amounts of bribes to deliberately undervalue properties, and reduce the Safai (tax).

The price of buildings is often pegged at rates prevailing in the early 1970s. Most homeowners are not even aware that a loss of revenue from Safa'i is crippling the availability of local services and infrastructure development in the city.

The tax is collected under a 1977 bill that became law in 1999 (published in gazette number 794). Mohammad Aslam Akrami, deputy financial and administrative assistant in the Kabul municipality, says the law, which took more than two decades to be passed, did not bother to upwardly revise the percentage charged as cleaning tax.

Under article 4 of the law the municipality should collect tax on buildings at the rate of 0.3 percent of the price of a residential building, 0.6 percent of government, 1 percent of industrial, and 0.75 percent of commercial buildings.

However, Abdul Zahir, properties manager in the 16th District of Kabul Municipality claims the tax was increased on the basis of a letter dated 26 February 2007 issued by the municipality's revenue department.

Tax on residential properties has increased to 0.387 percent, government buildings to 0.774, industrial to 1.29 percent, and commercial buildings to 0.967 percent.

Interestingly Abdul Wakil Attayee, director of revenues department in 2009, says he does not know about the revision in Safa’i, and the tax is being collected at the rate prescribed in the law implemented in 1999.

Home owners complain that the municipality over-values the property, forcing them to pay bribes to have the value lowered.


Residential property

Mesbah Uddin owns a house on Third Street in Kart-i-Naw. He says when he went to pay the Safa’i he was told he had to pay 40,000 Afs (688 USD) since he had not paid the tax for the last 10 years. As he did not have the money he paid a bribe of 8,000 Afs (137 USD) to have the tax burden lowered to 11,000 Afs (190 USD). What the district officials did was to revise the price of his two-storey house to 2.1 million Afs (36,150 USD). Last year Mesbah Uddin had rebuilt his house, which was partly destroyed by the war in 1992.

According to a property dealer, Noorullah Fazilyar, a house as big as Mesbah Uddin’s in Karte Naw would be worth more than 7 million dollars.

Mesbah Uddin is pragmatic. “No work can be done without bribes,” he says. “The municipality is not thinking of the loss of revenue to the government. As much bribe as you can pay they will decrease the cleaning tax for you!”

Mohammad Nabi, a resident of Kabul’s Qala-e-Zaman Khan, 16th District, claims he paid 3,000 Afs (52 USD) bribe to have his house undervalued to 1.3 million Afs (22,380 USD) and halve the cleaning tax to 1,700 Afs annually (30 USD). He had bought the property five years ago for 3.5 million Afs (60,250 USD).

Abdul Zahir, properties manager in the 16th District, thinks the Safa’i on Nabi’s house should be more than 5,000 Afs (86 USD) on the basis of calculations under the revised 2006 rates.

At the same time he says it is possible for officials to lower tax on Nabi’s house under discretionary powers provided in article 2 of the law on cleaning tax.

The article defines the tax as “specified cash funds that are gotten annually … for the city services unless unable to according to the following conditions:

  1. If the public is unable to pay.
  2. The tax is enough and there is no need.
  3. People are able to pay the tax without being heavily burdened.
  4. The revenue raised is not used for other purposes.

Property dealer Fazilyar cited the case of the house of Mohammad Qasim in an unplanned locality in 8th District that was priced at 910,765 Afs (15,700 USD) when the real price was more 2.5 million Afs (43,000 USD). Qasim was paying 325 Afs (5 USD) annually as Safa’i when he should be charged 7,500 Afs (130 USD)

Sayed Jawad Sadat, engineering director of 8th District, Kabul municipality, defended the low tax on Qasim. He said only the buildings were taxed in unplanned areas.

He claims administrative corruption in government offices would be dealt with. Then he adds facetiously, “If there was no administrative corruption, the anti-corruption office would not have been set up.”

Dr Mohammad Agha Hanif, specialist in internal medicine, and resident Kabul’s 9th District says district staff told him to pay 29,000 Afs (nearly 500 USD) as cleaning tax for three years. When he paid 5,000 Afs (86 USD) as bribe, the tax burden was reduced to 3,700 Afs (63 USD).

“Most people are poor. When they are told to pay 30,000 Afs as cleaning tax they have to pay a bribe to get it reduced,” says the doctor.

Ehsanullah, a resident of Labe Jar of Khair Khana area in the 11th District, says homeowners seeking to pay the tax at the district have to literally learn to get around the many snares set by hunters.

Ehsanullah was told to pay 15,000 Afs (258 USD) as cleaning tax. He paid a bribe of 6,000 Afs (103 USD) to bring the amount down to 3,700 Afs (63 USD).


Commercial areas

Hajji Wali Khan, owner of a commercial market complex, Arzan Qeemat, in the 12th District in Kabul, told IMC he pays only 51,350 Afs (885 USD) annually as Safa’i when it should be 300,000 Afs (5,165 USD). In 1391 he gave district staff the equivalent of 600 USD to reduce the cleaning tax amount. “There is no house or market in Kabul that has got the cleaning tax amount reduced without paying a bribe to district staff,” he claims.

An official in the 12th District, who did not want to be identified, confirmed bribes are taken to reduce the Safa’i tax like in the Hajji Wali Khan market.

“If money is not given the staff will not reduce the tax amount. Corruption cannot be eliminated,” he believes.

Trader Ahmad Shah says he pays 40,000 Afs (688 USD) as cleaning tax for a market that he owns in the first district of Kabul, and 190,000 Afs (3,270 USD) for a building he has given on rent to Etisalat Communication Company. “Municipality staff takes bribes under different pretexts. If the area is residential they say it is commercial. The owner has to pay a bribe.”

Abdul Wakil Attayee, director of revenue department, however, believes 60 percent of properties do not pay Safa’i.



Hajji Mustafa, owner of Omid-i-Bahar, a beverage manufacturing unit in Pul-i-Charkhi industrial park, says he pays 170,000 Afs (292 USD) annually as cleaning tax as decided by the 9th District officials. His property has been valued at 17 million Afs (292,660 USD). Mustafa has invested one million USD in his business. He would not answer questions on whether he had bribed officials, but said cryptically, “Those who have to deal with government offices have to compromise with government staff or their work will not be done."


Government buildings

The head of the revenue department in Kabul municipality says that a third of government offices have not paid Safa’i for years. Kabul municipality has reported the matter to the Council of Ministers on Oct 12 this year.

The council has set up a commission with members from the ministries of finance and economy, Kabul municipality, among others to sort out the issue.



Hajji Mohammad Eesa of Deh Dana (7th District) says he has not paid the cleaning tax in 10 years. He explains he cannot afford to either pay the tax or the bribe. “Until the administrative corruption is eliminated poor people would not be able to pay cleaning taxes,” he says.

Ghulam Ali who lives in Pole e Sukhta (6th District), adds, “The money for cleaning tax is not too much that people cannot afford to pay. But the bribe the municipality asks is way beyond the ability of people to pay.”



Engineer Mohammad Aslam Akrami, the financial and administrative assistant at Kabul municipality, thinks the process of calculating Safa’i should be simplified to stop the culture of bribing.

Lack of awareness among people about the law on the cleaning tax has prepared the ground for staff to demand bribes. A new bill to “prevent administrative corruption” was sent to the Ministry of Justice for “approval and processing”, says Akrami.

Abdul Rauf, a member of the legislature, says the justice department has sent the draft to the legislative committee of the Council of Ministers late last year.

Meanwhile, the municipality has started tightening the screws on those who have not paid the cleaning tax. People are being encouraged to pay, and those who do not will find their documents will not be endorsed by municipality officials, according to Akrami.

Kabul residents complain of poor local services. Mohammad Haroon, a resident of Deh Afghanan (2nd District) who has been paying the cleaning tax for the last two years, says there is rotting garbage right next to his house. “It has been lying there for two years. There is such a stink,” he complains. “Last year I spent 2 million Afs (34,430 USD) rebuilding my home!” he adds in frustration.


(*) Independent Media Consortium is a joint initiative of Pajhwok Afghan News, The Killid Group (radio and print media), Saba Media Organisation (Saba TV-Radio Nawa networks) and Hasht-e-Subh. This is the tenth of a series of investigative reports on corruption and human rights cases.
A report by Pajhwok's
Khwaja Basir Fetri.


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