Wolesi Jirga approves value-added tax law

KABUL or the lower house of parliament on Wednesday approved a law on value-added tax aimed at increasing the government’s revenues in the face of reducing foreign aid.

The measure was presented before the house for approval by the Finance and Budget Commission. Amir Khan Yar, the commission head, told lawmakers the law had been discussed by all the house panels and there had been no disagreement.

He said the law was important because, if implemented, it could increase the government’s revenues and enable Afghanistan to meet its domestic demands.

Besides exports, the law was not directed at food items, health services and ownership matters, he said.

Yar said businesses with investments above 200 million afghanis fell under the value-added tax. He said the number of such firms was 400 in Afghanistan.

“This tax is not directed at goods that meet the needs of our poor people. If a machine is bought in Pakistan for $1,000, the buyer pays tax on the machine’s value at the Torkham border, if the machine is sold for $1200 in Afghanistan, then the tax is on the $200 income,” explained Yar by giving an example.

He said value-added taxes were paid in 145 countries as one of the best tax collection system.

Of 125 MPs present, 111 approved the law, with Speaker Abdul Rauf Ibrahimi saying the measure would be forwarded to the Meshrano Jirga or the upper house for approval soon.

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