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Afghan Government To Impose Income Tax For The First Time

by Ulrika Lomas, for LawAndTax-News.com, Brussels

31 May 2005

The government of Afghanistan announced last week that it plans to impose an income tax on nationals and foreigners working in the country.

The wage tax will be imposed from September 23, and has been deemed necessary in order to improve government revenue. Currently, around half of the budget is received from donor nations, which are understandably eager to see the development of sustainable revenue streams.

The tax will reportedly apply at a rate of 10% on monthly incomes of over 12,500 afghanis, with a 20% rate being applied to wages of over 100,000 afghanis per month.

However, the move has been critised by some in the country's business community, who argue that the tax base is too narrow, and suggest that companies are already overburdened by corporate and other business-related levies.

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