UN warns Kabul over poor tax collection

KABUL, Jan Kubis, on Saturday warned Afghanistan could face economic problems if the government failed to increase its domestic revenue.

Addressing a conference on international aid pledges held out to Afghanistan, Kubis praised the government’s efforts at fulfilling its own promises made at the Tokyo Conference.

The UNAMA head said the international community would remain committed to keeping the promises it held out to Afghanistan at the Tokyo conference in 2012.

At the conference, donors had pledged $16 billion to Afghanistan in civilian aid for four years in a bid to safeguard the country’s future after foreign troops’ pullout by the end of the current year.

Referring to a number of bills approved by Parliament, the UN representative said the legislative measures had been crucial in bringing reforms to state institutions.

The UN was aware of problems and challenges facing Afghanistan in tax collections, he said. “We appreciate every effort that brings improvement to the revenue sector. We’re looking forward to seeing further practical steps by the Afghan government to streamline the revenue collection regime and remove hurdles in this regard,” said Kubis.

He feared Afghanistan could plunge into a financial crisis if practical steps were not taken to strength domestic revenue and the tax collection system.

Speaking on the occasion, Finance Minister Hazrat Omar Zakhilwal said Afghanistan had made 17 commitments at the Tokyo conference and 16 of them had been honoured, claiming significant progress in meeting the last vow.

He said some laws, including those concerning the mining sector and taxes, were needed to be approved for Afghanistan’s fast-track economic growth and luring investments.

He hoped Parliament would ratify another two draft laws on money-laundering and terror financing as soon as possible, saying the measures, if approved, would be another milestone in achieving stability and prosperity.  

The minister complained negative propaganda by foreign media about post-2014 Afghanistan had scared away investors, affecting the country’s economic position.

However, Zakhilwal said all doomsday predictions about Afghanistan had proved groundless. “If our domestic revenue in the first quarter of 2013 is compared with the corresponding period in 2014, it shows a 14 percent rise,” the minister claimed.

However, he acknowledged they could not achieve the target of a 20 percent increase in revenue set for Afghanistan at the Tokyo conference. A third meeting on evaluation of Tokyo Conference commitments would be held in Kabul about two months later, Zakhiwal concluded.    

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