Agreement Signed For Afghan Small Taxpayers Reform

by Mary Swire, Tax-News.com, Hong Kong

30 November 2010

Dr Hazrat Omar Zakhilwal, Afghan Minister of Finance, and Mr Suliman Fatimi, chief executive of Harakat, have signed an agreement for the reform of the country’s Small Taxpayers Office. The project will be implemented in Kabul and completed in three years.

Harakat is an independent, not-for-profit organization and its aim is to improve the business environment in Afghanistan. It provides grants to the private and public sectors for projects that reduce barriers to doing business in the country such as corruption, bureaucracy and weak regulation.

It is proposed that the project will help the Afghanistan Revenue Department improve its relationship with small businesses. Out of 130,000 registered taxpayers 30,000 are small businesses, and the Ministry of Finance says that in the future they should receive improved services which will include simplified administrative formalities, shortened delays and better advice through this new reform.

Dr Zakhilwal said: “The Ministry of Finance will take any necessary steps to increase revenue collection and to help Afghan business develop in a lawful, secure and transparent financial environment. This reform is to underline that we acknowledge the role of small businesses in our national development.”

Mr Fatimie stated: “Investment climate reform of the tax system should aim at reinforcing both formalization and institutional effectiveness, which in return improves tax compliance by increasing tax payers’ consent and reducing the costs of tax coercion."

“By funding the reform of the Small Taxpayers Office Harakat aims to create a more equitable and efficient taxation system for small taxpayers, strengthen the capacity of the Afghanistan Revenue Department to tackle corruption and help streamline taxation regulation,” he added.

The proposed reform has the backing of the Afghanistan Chamber of Commerce and Industries.

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