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Afghans warned: the taxman is coming after you
By Katharine Houreld | Reuters
KABUL (Reuters) - One of Afghanistan's most surprising success stories lies tucked away on a potholed street notorious for suicide bombings and lined with rusting construction equipment.
The work of the country's top tax collector is more inspiring than the view from his office in Kabul. Taxes and customs raised $1.64 billion last financial year, a 14-fold increase on 10 years ago. That means, now, the government can pay just over half of its recurrent costs such as salaries.
Thanks to tougher enforcement procedures, Afghanistan's tax to GDP ratio today stands above 11 percent - ahead of neighbouring Pakistan's dismal 9 percent.
Increasing revenues is vital as donors begin reducing aid ahead of the 2014 drawdown of NATO troops, who have provided the backbone for security since U.S. forces invaded after the September 11 attacks on the United States.
By the end of this year the United States alone will have spent $100 billion on Afghan reconstruction. But future pledges are a fraction of that.
"We are largely dependent on international aid. We would like to be independent," said Abdurrahman Mujahid, the new head of the revenue department. "I would like a sustainable Afghanistan for all the children."
Despite rising revenues, the government will rely heavily on donors for years to come. Taxes, customs and mining revenue will only meet $2.5 billion out of a $7 billion budget this year.
Most of the revenue comes from large corporate taxpayers, who complain their payments have not improved power cuts, potholed roads or security.
Corporations pay a flat tax of 20 percent - the same rate for an individual earning over $2,000 a month.
But unlike developed countries where personal income tax generates a sizeable chunk of revenue, most Afghans scoff at the idea of giving the government some of their meagre earnings.
The average annual income, in a country ranked one of the world's poorest, is just $470, according to the World Bank. Those making less than $100 a month don't have to pay tax.
"It's not a good government," said moneychanger Abdurrahman Arif, 28, as he held a wad of soiled notes and scanned for customers. "I don't pay tax. The rich people don't and the government should go to them before they come to me."
Afghanistan has a similar problem to neighbouring Pakistan - the very wealthy don't pay their share, and weak institutions often have little way of forcing them.
Authorities admit that taxing the rich isn't easy in a country where the powerful often command militias. But Mujahid promises tax evaders will "be introduced to the law enforcement agencies".
SUBSTANTIAL ACHIEVEMENT
Much of Afghanistan's money is in an undocumented black economy. Corruption is endemic and the country produces 90 percent of the world's opium. Billions of dollars in cash leave the country every year in suitcases.
The security situation is discouraging. Taliban and other militias have made gains in many areas as foreign combat forces wind down their missions.
But some Afghans still manage to make money. Many businesses are fuelled by the aid dollars that have poured into the country over the last decade. Luxury supermarkets, travel agencies and stationery shops crowd the capital's streets.
A U.S. embassy official in Kabul commended Afghanistan's ability to raise tax revenues.
"It's a pretty substantial achievement," the official said, but noted the nation still faced a large funding gap, partly because of its huge security bill.
"It's going to continue being a problem until they can get revenues from the extractive industry, and that's going to take some time," the official said, referring to Afghanistan's rich but undeveloped mineral deposits.
Donors currently pay for just under half Afghanistan's operating costs - mostly government salaries - and more than three-quarters of all development projects like roads, dams and electricity equipment.
Rampant corruption means this money is often stolen, angering donors, fuelling anti-government rage and keeping aid from some of the world's neediest families.
Donors hope that if Afghans foot more of the bill for public services they may become less tolerant of graft from their leaders.
PUGNACIOUS PREDECESSOR
Mujahid, the new head of the revenue department, has large shoes to fill. His predecessor Ahmad Shah Zamanzai oversaw much of the department's growth and didn't shrink from confrontation.
When a vice-president refused to pay tax on income from renting out houses he owned, Zamanzai threatened to leak it to the press. Elections were approaching. The vice president paid up.
Under Zamanzai, the tax department jailed more than 20 tax evaders, froze bank accounts, slapped on travel bans and shuttered the premises of businesses that refused to pay.
In one showdown, he took on the glitzy wedding halls that have mushroomed up in the capital. When the 60 or so venues refused to pay their dues, he had police padlock a dozen of the biggest until the rest fell into line.
Zamanzai was appointed head of the state-run Pashtany Bank as part of a bureaucratic reshuffle this month. His first task, he said, would be to use skills honed in the tax department to extract overdue loan repayments from powerful Afghans.
But the tough tax enforcement has angered some businessmen.
Najib Ullah Latify's spotless factory, full of humming machinery and rows of workers in blue overalls and yellow hard hats, stands a few minutes drive from the tax office. High Standard Pipe employs 850 people and supplies pipes for projects providing clean water all over Afghanistan.
Latify said he'd expand but harassment from the tax man was hurting his business.
In recent years, he says, he's been repeatedly overcharged by the tax office and promised refunds have not been credited. Officials frequently offer to slash his tax bill in return for bribes, he added. When he refuses, he says, officials disrupt his imports and suspend his license.
"I don't know what to do, I have shouted everywhere that they are ruining my business," he said.
"I don't mind paying taxes. Even if 60 percent of it is spent on drinking and shopping and trips for (politicians') wives, maybe 40 percent will go to schools or hospitals. But they must tax me correctly."
The new tax chief, Mujahid, was not familiar with Vitaly's case, but promised to investigate. More than 10 tax collectors - whose basic salaries start at $180 a month - have been fired for corruption in the last two years.
"Corruption is a part of public life in Afghanistan," said Mujahid. "We have the aim to make this department corruption-free."
This year he's planning to finish computerizing tax records, usher through a law on Value Added Tax, and strengthen collection in the provinces - more than 90 percent of government taxes currently come from the capital.
"There's a lot of achievements, but for sure we have problems, and the biggest problem is corruption," he said.
(Editing by Jeremy Laurence)
Karzai in Qatar for Possible Afghan Taliban Office
VOA News March 31, 2013
Afghan President Hamid Karzai is in Qatar to discuss the possibility of having the Taliban open a political office there to help move Afghanistan's peace process forward.
Karzai arrived in the Gulf nation on Saturday for a two-day state visit, alongside his foreign minister Zalmai Rassoul and the chairman of Afghanistan's High Peace Council Salahuddin Rabbani. Since then, he has met with several Qatari officials, including the emir Sheikh Hamad bin Khalifa Al Thani.
Karzai has long insisted that any peace process with the Taliban be an Afghan-led one, and previously, he was opposed to the militant group having a meeting place outside Afghanistan.
The United Nations this week welcomed President Karzai's planned trip to Qatar and issued another call for the Taliban to come to the negotiating table.
Karzai has stressed that he would only start talks with the Taliban if they broke all links with al-Qaida and gave up violence. But the Taliban has repeatedly refused to talk with the Karzai administration, calling it a "puppet regime" of the U.S.-led coalition.
Speaking to the French news agency, a Taliban spokesman said the group's opening of any office in Qatar would not be related to the Afghan president, but rather, it would be a matter between the Taliban and the Qatari government. The spokesman also said that any Taliban representatives already in Qatar would not see or talk to Karzai.
The international coalition fighting in Afghanistan is in the middle of handing security control of the country to the Afghan national forces as nearly all coalition combat troops mobilize to leave the country by the end of next year.
Some information for this report was provided by AP and AFP.
Hope for Talks With Taliban Sends Karzai to Qatar
Wall Street Journal By NATHAN HODGE And ZIAULHAQ SULTANI March 30, 2013
KABUL - Afghan President Hamid Karzai arrived Saturday in the Gulf emirate of Qatar, on a trip that Afghan officials have billed as an effort to kick-start a faltering peace process with the Taliban.
Mr. Karzai, who is traveling with his top policy advisors, is due to meet Sheikh Hamad Bin Khalifah Al-Thani, the emir of Qatar, as well as other top Qatari officials on the two-day visit.
At the top of the agenda: opening peace talks with the Taliban, a group that has waged a lengthy insurgent campaign against the Kabul government. Last year, the Taliban leadership began to establish a political office in Qatar to facilitate peace talks with the U.S., but they have refused thus far to have direct negotiations with Mr. Karzai's government.
The Afghan government and Qatar had a falling out in the past, with Afghan officials complaining that they weren't consulted sufficiently about the opening of the Taliban office. Mr. Karzai's visit to Doha is designed to patch up relations, Afghan officials said.
Janan Mosazai, a spokesman for the Afghan foreign ministry, told reporters Saturday that Mr. Karzai would discuss the Taliban's representation in Qatar, but declined to say whether the Afghan president would meet in person with Taliban representatives.
"The important thing about this visit is that President Karzai is traveling at the invitation of the emir of Qatar," he said. "They will talk about the possibility of a Taliban office in Qatar to have direct negotiations."
Taliban spokesman Zabihullah Mujahid said Taliban representatives wouldn't meet Mr. Karzai.
"Where he [Karzai] goes, whom he meets and what is on the agenda is his business, as are the issues the emir raises with Karzai," he said. "But we are not involved in their discussions, and Karzai is not going to meet Taliban representatives in Qatar."
Mr. Karzai's trip is the latest effort to foster a peace process that has yet to yield formal negotiations. The Taliban suspended contacts with the U.S. last year amid discussions about swapping Taliban detainees at Guantanamo Bay, Cuba, for a U.S. Army sergeant held captive by the insurgents. And in December, Taliban representatives met in France with members of the Northern Alliance, which fought against the Taliban until the U.S.-led invasion in 2001.
"The reason he is trying to renew the peace process is because he believes the Afghan government should be in the lead," said Shahmahmood Miakhel, Afghanistan country director for the U.S. Institute of Peace. "He is not in favor of indirect contact."
Mr. Karzai's visit to Qatar comes at a sensitive moment for Afghanistan. The clock is ticking toward the withdrawal of U.S. and international troops by the end of next year, and Mr. Karzai is due to leave office in 2014.
"If the Taliban is ready to talk to the Kabul government, it's a success" for Mr. Karzai, Mr. Miakhel added.
Adding to the uncertainty is an escalating confrontation between Afghanistan and neighboring Pakistan, which the Taliban has used as a sanctuary and an organizational base. Last month, Mr. Karzai and Pakistani President Asif Ali Zardari agreed to seek a six-month timeline to reach a peace settlement with the Taliban, but Afghan officials in recent weeks have accused Pakistan of undermining the peace process.
Prior to Mr. Karzai's departure, his spokesman, Aimal Faizi, had more sharp words for Pakistan. In a transcript released late Friday by the presidential place, Mr. Faizi said Islamabad had imposed "unacceptable" terms on Kabul as a condition for supporting peace talks.
"Pakistan doesn't currently show any interest in the peace process," he said.
Write to Nathan Hodge at nathan.hodge@wsj.com
Afghan foreign minister discuss railway construction with Tajikistan
By SAJAD - 31 Mar 2013, 1:44 pm Khaama Press
Afghan foreign minister Zalmai Rasoul on Friday discussed the construction of railway link connecting Tajikistan, Afghanistan and Turkmenistan as well as implementation of the Central Asia South Asia Electricity Transmission and Trade Project (CASA 1000) with Tajik president Emomali Rahmon.
According to the Tajik president’s official website, the sides also discussed cooperation between relevant bodies of the two countries for implementation of ambitious regional projects.
Dr. Rassoul underlined Afghanistan’s commitment to the core values and principles of the only continent-wide process of its kind to promote cooperation across Asia.
“Afghanistan particularly, fully and whole-heartedly endorses and aligns itself with the concept of ACD enhanced regional connectivity to promote trade, investment, transit, people-to-people contacts. This is a concept that lies at the heart of our own vision for a life of peaceful and mutually beneficial co-existence and cooperation with our neighbours and the broader region around us,” Dr. Rassoul said.
Dr. Rassoul added that Afghanistan’s unique place as an “Asian Roundabout” offered tremendous opportunities in all the above areas among three of Asia’s major sub-regions, namely South Asia, Central Asia/Eurasia and the Middle East/Western Asia.
“To illustrate this uniqueness, consider the fact that Afghanistan is less than a single day’s drive to two of the world’s largest economies, both of which are growing at a monumental rate,” Dr. Rassoul said. “Consider also that Afghanistan is the only dark spot in our continent’s and especially in the Heart of Asia region’s vast railway networks. Removing this dark spot by implementing existing plans to connect the railway networks of Pakistan, Iran and all Central Asian states with one another and with other sub-regions in the Asian continent and beyond will dramatically increase trade, investments and people-to-people contacts. Similarly, Afghanistan is the one missing link in connecting energy-rich Central Asia with energy-deficient South Asia through power grids and energy pipelines.”
Dr. Rassoul added that the Afghan people and government’s ongoing successful efforts to improve security, build lasting peace, strengthen state institutions and further consolidate our national sovereignty leading up to and beyond 2014 will also increasingly allow Afghanistan to contribute to regional peace, security and economic development, as well as to the ACD’s vision and goals.
Among other things, participants at this meeting agreed to the establishment of a provisional secretariat for the ACD in Kuwait until the next summit in Thailand in 2015.
They also expressed hope that a trilateral trade and transit pact that would be signed between Tajikistan, Afghanistan and Pakistan would pave the way for further expansion of trade and economic cooperation between the nations.
President Rahmon noted that Tajikistan was ready to provide assistance to Afghanistan with training of personnel for its railway and other sectors.
Pakistani Ulema chief once again urge Afghanistan to apologize
By MEENA HASEEB - 31 Mar 2013, 12:04 pm Khaama Press
Pakistani Ulema Council Chief once again emphasized that the Afghan government must apologize for accusing him of endorsing suicide bombing in Afghanistan.
While speaking during an exclusive joint debate hosted by Radio Free Europe and Radio Mashaal, Maulana Tahir Ashrafi denied endorsing suicide bombing in Afghanistan.
He said, “I have not mentioned about suicide attack. It is a propaganda against me and against my country. I will not sit-in for peace conference unless the Afghan government does not apologize from me.”
This comes as Maulana Tahir Ashrafi quoted by media agencies earlier in March said that suicide bombing is allowed in Afghanistan as long as foreign troops are present in this country.
However Maulana Tahir Ashrafi denied the reports but the allegations sparked widespread objections by the Afghan people and president Hamid Karzai.
While speaking during a joint press conference with the NATO secretary general president Karzai said, “Apparently those who are encouraging and supporting terrorism and kill ordinary Afghan people including men and children should be added to the blacklist. This a violation of the human dignity to kill women and children.”
Afghan officials have long been accusing Pakistan for supporting militants in Afghanistan but Islamabad has repeatedly denied the allegations.
The conference of Afghan and Pakistani Ulemas was agreed during a joint trialteral summit between Afghan, Pakistani and British leaders back in February.
However Pakistan Ulemas boycotted the conference calling it a one side attack against the Taliban militants group without having any specific agenda.
In the meantime Qazi Mohammad Waqad a member of the Afghan high peace council who participated in the debate denied the allegations and said that the conference had a clear agenda but was boycotted by Maulana Tahir Ashrafi.
He said, “Maulana Tahir Ashrafi following a Fatwa endorsed the holy war by Taliban in Afghanistan and denied to participate in the conference due to the presence of foreign troops in the country.”
Mr. Waqad also insisted that the government of Afghanistan does not need to apology from anyone and only the misunderstandings should be cleared.
Nato alarm over Afghan army crisis: loss of recruits threatens security as handover looms
The IndependentBy Brian Brady, Jonathan Owen Sunday 31 March 2013
Thousands of recruits are quitting the newly formed Afghan police and armed forces every month, raising fears over their ability to protect the emerging democracy when coalition troops leave the country in less than two years' time. For every 10 new soldiers recruited to the Afghan National Army (ANA), at least three are lost because they have been sacked, captured or killed in action, new figures have revealed. British officials admit that current "attrition rates", with more than 5,000 soldiers quitting every month, threaten the force's long-term effectiveness.
The Afghan National Security Forces' (ANSF) failure to hit recruitment and retention targets is particularly troubling for Nato's International Security Assistance Force (Isaf), as the army and the police are seen as vital to preventing the return of the Taliban.
The latest British Government assessments of Afghanistan's progress towards the goals of stability and democracy confirm that the rate of recruits leaving is far worse than targets set by coalition leaders, amounting to 63,000 every year, or more than a third of the current size of the army.
The Ministry of Defence (MoD) has warned that the ANA's attrition rates "continue to represent a risk to the sustainability of the future force". The figures raise huge questions over the ability of the ANSF to reach the size regarded as necessary to take the reins before thousands of international troops leave Afghanistan by the end of next year.
The Foreign Office (FCO) has also admitted that the number of recruits exiting the ANA, the border police and the national civil order police has caused "a drain on skills".
The dispiriting details of the failure to develop a "critical mass" of ANSF recruits who can lead the fight against the Taliban come three months after The Independent on Sunday revealed that FCO officials feared the police were still "endemically corrupt" and riven with nepotism and drug abuse.
A series of internal FCO papers laid bare official concerns about the fate of Afghanistan and its chances of holding the Taliban at bay if its leaders fail to "root out corruption" throughout the ranks of the Afghan National Police (ANP).
Critics last night said they feared Isaf was heading for a "face-saving exit" from Afghanistan, leaving an army and police forces that were not yet ready to take over the security of their own country.
Shashank Joshi, of the Royal United Services Institute, said: "There is a long-term problem with attrition that has not been resolved, and I suspect the [coalition's] priority now is to salvage the mission and leave as quickly as they can. Even where the Foreign Office suggests there is an improvement in the ANSF, they can't guarantee this will continue after withdrawal because Afghan forces will no longer be able to rely on massive support from the coalition such as intelligence and airlift."
Coalition governments have spent billions developing the ANSF in an effort to create the fully staffed and trained national security forces seen as crucial if Afghanistan is to thrive as a democratic state.
But the FCO's monthly progress reports on Afghanistan revealed that the ANA and ANP missed their monthly recruiting targets in both January and February. The strength of the army stands at 175,000 – 12,000 below its projected size – while the ANP is 7,000 short of the 157,000 target set by coalition leaders.
However, the continued leaking away of soldiers and police officers who had already been tempted into the forces was another cause for alarm.
In January, the ANA's monthly attrition rate was 4.1 per cent, almost three times the target figure, although the Foreign Office maintained it was "artificially high". The rate of recruits leaving was 2.9 per cent – more than double the target – in February.
"High attrition rates within the ANA continue to represent a risk to the sustainability of the future force," the January update declared. "High levels of recruitment mean that this is not enough to endanger overall growth targets, [but] it does cause a drain on skills. Isaf, Nato Training Mission-Afghanistan and the Afghan MoD recognise this and are working hard to address it."
Afghan Govt Repeats Claim of Pakistan’s ‘Unacceptable’ Demands
TOLOnews.com By Sharif Amiry Saturday, 30 March 2013
Afghanistan's Foreign Ministry on Saturday insisted that Pakistan demanded "unacceptable" conditions in exchange for its cooperation in the peace process, despite Islamabad yesterday rejecting the charge made by the Afghan presidential spokesman earlier this week.
"Unfortunately, Pakistan has changed its position in supporting a peace process in Afghanistan. When the Pakistani government understood that the peace process is being led by the Afghan government and Afghanistan's High Peace Council, it offered some conditions which are unacceptable to the Afghan government," foreign ministry spokesman Janan Mosazai said at a press briefing in Kabul.
President Hamid Karzai's spokesman Aimal Faizi was quoted by AFP on Thursday as saying that Pakistan "demanded we cut all ties to India, send army officers to Pakistan for training, and sign a strategic partnership".
Pakistan's Foreign Office spokesman on Friday rejected Faizi's comments, pointing out that it was Karzai who had proposed a bilateral Strategic Partnership Agreement – which did not include India.
"Pakistan is whole-heartedly supporting and facilitating the peace process without any conditions or preference for any particular group or party," he said.
"Pakistan did not demand that Afghanistan should 'cut all ties to India'. Pakistan has no objection or issue with Afghanistan developing relations with any country. We have only stressed that those external forces which are using the soil of Afghanistan to destabilise Pakistan should be discouraged."
Mosazai today repeated the Afghan government's claim, coinciding with the visit of Karzai to the Gulf nation Qatar for peace talks.
Karzai Saturday travelled to Qatar's capital Doha to negotiate the opening of a political office for the Taliban.
Reports have suggested that Karzai will meet with Taliban representatives, however this has not been confirmed. The Qatari government said Karzai is meeting with country officials.
"The negotiation over the opening of an office for the Taliban will be a part of a negotiation between Afghanistan's government and Qatar's government," Mohammad Fayiq Wahidi, the Qatari presidents' deputy spokesman said Saturday in a telephone interview.
While Karzai's trip to Qatar demonstrates the importance of the plan to give the Taliban a political office, others in the Afghan government question the wisdom of sidelining Pakistan from the peace process.
"I think that we cannot ignore Pakistan's role in the peace process while major Taliban commanders are living in Pakistan," Kabul MP Sayed Hussain Anwari told TOLOnews.
Earlier this week, Afghanistan cancelled a planned military exercise with Pakistan to protest a shelling into Kunar province from the Pakistan side of the border.
Protestors Block Kabul-Parwan Highway Over Civilian Deaths
TOLOnews.com By Rafi Sediqi Saturday, 30 March 2013
Kabul-Parwan highway was blocked Saturday after a number of residents from Kabul's northern district of Mir Bachakot staged a demonstration to protest the deaths of four residents allegedly killed by a police official who has gone unpunished.
The Mir Bachakot protestors claimed that fellow residents Yar Dil Nizami and three others from the Do Koh village were killed three months ago allegedly by the Civil Order Police commander Zemarai Paikan who has used his power to escape prosecution.
Another six residents were injured in the incident. Yar Dil Nizami was singled out because he headed a civil society action group.
The demonstrators were protesting the lack of action of the government in pursuing the case.
"The government has not worked to arrest the perpetrators of Yar Dil and three others. It is known that the perpetrator is the civil order police commander. We will continue to demonstrate if they not arrested," Gul Dad Nizami, the brother of Yar Dil said.
"We, the demonstrators, are residents of Do Koh village. Our only wish is the punishment of those who killed in the village and injured six others," one of the protestors told TOLOnews.
The Ministry of Interior (MOI) Saturday told said that the investigation was in the hands of the Attorney General.
"The delegation who was appointed by the Interior Ministry completed the investigation and sent it to the Attorney General. We that the Attorney General announces its decision as soon as possible," MOI deputy spokesman Najibullah Nikzad said.
The demonstration caused problems for others in the area and those seeking to travel on the highway.
"We have been waiting for several hours for the highway to be opened. The way is blocked because of a demonstration and creating lots of problems. We are going to Parwan province," Parwan resident Shirin Aqa told TOLOnews.
Helmand Tops List of Drug Smuggling Provinces
TOLOnews.com By Haseeb Maudoodi Saturday, 30 March 2013
Helmand province had the highest number of drug smuggling cases last year out of Afghanistan's 34 provinces with 17.9 percent of all cases coming from the southern province, according to the annual report of Counter Narcotics Justice Centre.
From March 2011 to March 2012 (Persian year 1391), the total number of drug trafficking cases in Afghanistan dropped to 590, compared to the previous corresponding period of 635 cases.
Southern Kandahar province and central Kabul province followed Helmand for the highest rates of drug smuggling cases, while Paktika, Bamiyan, and Badghis had the lowest number of cases, the report said.
According to the US-funded centre, in 1391 security forces netted a total of 4101 kilograms of heroin, 36,429kg of morphine, 71,621kg of opium, 120,515kg of hashish, 46,327kg of solid chemical materials, 29,322 litres of liquid materials, and 42,771 litres of alcoholic drinks.
Around 647 persons were arrested for smuggling drugs, weapons, money, or vehicles, it added.
"The Counter-Narcotics Justice Centre alone cannot fight the phenomena, therefore every organisation needs to understand its responsibility and endeavor to obliterate drugs," said Yar Mohammad Hussainkhel, general director of special attorney for Counter Narcotics.
According to the officials, those captured smuggling drugs were not only Afghans citizens – at least nine were citizens of Iran and three were from Pakistan.
"These foreigners disturb Afghanistan's social system, therefore they should be punished according to our laws, and not returned to their countries," said Ahmad Khalid Mowahed, the centre's spokesman told TOLOnews.
Afghanistan is said to be the largest producer of drugs across the globe, responsible for around 90 percent of the world's opiates.
www.afghanistannewscenter.com
By Katharine Houreld | Reuters
KABUL (Reuters) - One of Afghanistan's most surprising success stories lies tucked away on a potholed street notorious for suicide bombings and lined with rusting construction equipment.
The work of the country's top tax collector is more inspiring than the view from his office in Kabul. Taxes and customs raised $1.64 billion last financial year, a 14-fold increase on 10 years ago. That means, now, the government can pay just over half of its recurrent costs such as salaries.
Thanks to tougher enforcement procedures, Afghanistan's tax to GDP ratio today stands above 11 percent - ahead of neighbouring Pakistan's dismal 9 percent.
Increasing revenues is vital as donors begin reducing aid ahead of the 2014 drawdown of NATO troops, who have provided the backbone for security since U.S. forces invaded after the September 11 attacks on the United States.
By the end of this year the United States alone will have spent $100 billion on Afghan reconstruction. But future pledges are a fraction of that.
"We are largely dependent on international aid. We would like to be independent," said Abdurrahman Mujahid, the new head of the revenue department. "I would like a sustainable Afghanistan for all the children."
Despite rising revenues, the government will rely heavily on donors for years to come. Taxes, customs and mining revenue will only meet $2.5 billion out of a $7 billion budget this year.
Most of the revenue comes from large corporate taxpayers, who complain their payments have not improved power cuts, potholed roads or security.
Corporations pay a flat tax of 20 percent - the same rate for an individual earning over $2,000 a month.
But unlike developed countries where personal income tax generates a sizeable chunk of revenue, most Afghans scoff at the idea of giving the government some of their meagre earnings.
The average annual income, in a country ranked one of the world's poorest, is just $470, according to the World Bank. Those making less than $100 a month don't have to pay tax.
"It's not a good government," said moneychanger Abdurrahman Arif, 28, as he held a wad of soiled notes and scanned for customers. "I don't pay tax. The rich people don't and the government should go to them before they come to me."
Afghanistan has a similar problem to neighbouring Pakistan - the very wealthy don't pay their share, and weak institutions often have little way of forcing them.
Authorities admit that taxing the rich isn't easy in a country where the powerful often command militias. But Mujahid promises tax evaders will "be introduced to the law enforcement agencies".
SUBSTANTIAL ACHIEVEMENT
Much of Afghanistan's money is in an undocumented black economy. Corruption is endemic and the country produces 90 percent of the world's opium. Billions of dollars in cash leave the country every year in suitcases.
The security situation is discouraging. Taliban and other militias have made gains in many areas as foreign combat forces wind down their missions.
But some Afghans still manage to make money. Many businesses are fuelled by the aid dollars that have poured into the country over the last decade. Luxury supermarkets, travel agencies and stationery shops crowd the capital's streets.
A U.S. embassy official in Kabul commended Afghanistan's ability to raise tax revenues.
"It's a pretty substantial achievement," the official said, but noted the nation still faced a large funding gap, partly because of its huge security bill.
"It's going to continue being a problem until they can get revenues from the extractive industry, and that's going to take some time," the official said, referring to Afghanistan's rich but undeveloped mineral deposits.
Donors currently pay for just under half Afghanistan's operating costs - mostly government salaries - and more than three-quarters of all development projects like roads, dams and electricity equipment.
Rampant corruption means this money is often stolen, angering donors, fuelling anti-government rage and keeping aid from some of the world's neediest families.
Donors hope that if Afghans foot more of the bill for public services they may become less tolerant of graft from their leaders.
PUGNACIOUS PREDECESSOR
Mujahid, the new head of the revenue department, has large shoes to fill. His predecessor Ahmad Shah Zamanzai oversaw much of the department's growth and didn't shrink from confrontation.
When a vice-president refused to pay tax on income from renting out houses he owned, Zamanzai threatened to leak it to the press. Elections were approaching. The vice president paid up.
Under Zamanzai, the tax department jailed more than 20 tax evaders, froze bank accounts, slapped on travel bans and shuttered the premises of businesses that refused to pay.
In one showdown, he took on the glitzy wedding halls that have mushroomed up in the capital. When the 60 or so venues refused to pay their dues, he had police padlock a dozen of the biggest until the rest fell into line.
Zamanzai was appointed head of the state-run Pashtany Bank as part of a bureaucratic reshuffle this month. His first task, he said, would be to use skills honed in the tax department to extract overdue loan repayments from powerful Afghans.
But the tough tax enforcement has angered some businessmen.
Najib Ullah Latify's spotless factory, full of humming machinery and rows of workers in blue overalls and yellow hard hats, stands a few minutes drive from the tax office. High Standard Pipe employs 850 people and supplies pipes for projects providing clean water all over Afghanistan.
Latify said he'd expand but harassment from the tax man was hurting his business.
In recent years, he says, he's been repeatedly overcharged by the tax office and promised refunds have not been credited. Officials frequently offer to slash his tax bill in return for bribes, he added. When he refuses, he says, officials disrupt his imports and suspend his license.
"I don't know what to do, I have shouted everywhere that they are ruining my business," he said.
"I don't mind paying taxes. Even if 60 percent of it is spent on drinking and shopping and trips for (politicians') wives, maybe 40 percent will go to schools or hospitals. But they must tax me correctly."
The new tax chief, Mujahid, was not familiar with Vitaly's case, but promised to investigate. More than 10 tax collectors - whose basic salaries start at $180 a month - have been fired for corruption in the last two years.
"Corruption is a part of public life in Afghanistan," said Mujahid. "We have the aim to make this department corruption-free."
This year he's planning to finish computerizing tax records, usher through a law on Value Added Tax, and strengthen collection in the provinces - more than 90 percent of government taxes currently come from the capital.
"There's a lot of achievements, but for sure we have problems, and the biggest problem is corruption," he said.
(Editing by Jeremy Laurence)
Karzai in Qatar for Possible Afghan Taliban Office
VOA News March 31, 2013
Afghan President Hamid Karzai is in Qatar to discuss the possibility of having the Taliban open a political office there to help move Afghanistan's peace process forward.
Karzai arrived in the Gulf nation on Saturday for a two-day state visit, alongside his foreign minister Zalmai Rassoul and the chairman of Afghanistan's High Peace Council Salahuddin Rabbani. Since then, he has met with several Qatari officials, including the emir Sheikh Hamad bin Khalifa Al Thani.
Karzai has long insisted that any peace process with the Taliban be an Afghan-led one, and previously, he was opposed to the militant group having a meeting place outside Afghanistan.
The United Nations this week welcomed President Karzai's planned trip to Qatar and issued another call for the Taliban to come to the negotiating table.
Karzai has stressed that he would only start talks with the Taliban if they broke all links with al-Qaida and gave up violence. But the Taliban has repeatedly refused to talk with the Karzai administration, calling it a "puppet regime" of the U.S.-led coalition.
Speaking to the French news agency, a Taliban spokesman said the group's opening of any office in Qatar would not be related to the Afghan president, but rather, it would be a matter between the Taliban and the Qatari government. The spokesman also said that any Taliban representatives already in Qatar would not see or talk to Karzai.
The international coalition fighting in Afghanistan is in the middle of handing security control of the country to the Afghan national forces as nearly all coalition combat troops mobilize to leave the country by the end of next year.
Some information for this report was provided by AP and AFP.
Hope for Talks With Taliban Sends Karzai to Qatar
Wall Street Journal By NATHAN HODGE And ZIAULHAQ SULTANI March 30, 2013
KABUL - Afghan President Hamid Karzai arrived Saturday in the Gulf emirate of Qatar, on a trip that Afghan officials have billed as an effort to kick-start a faltering peace process with the Taliban.
Mr. Karzai, who is traveling with his top policy advisors, is due to meet Sheikh Hamad Bin Khalifah Al-Thani, the emir of Qatar, as well as other top Qatari officials on the two-day visit.
At the top of the agenda: opening peace talks with the Taliban, a group that has waged a lengthy insurgent campaign against the Kabul government. Last year, the Taliban leadership began to establish a political office in Qatar to facilitate peace talks with the U.S., but they have refused thus far to have direct negotiations with Mr. Karzai's government.
The Afghan government and Qatar had a falling out in the past, with Afghan officials complaining that they weren't consulted sufficiently about the opening of the Taliban office. Mr. Karzai's visit to Doha is designed to patch up relations, Afghan officials said.
Janan Mosazai, a spokesman for the Afghan foreign ministry, told reporters Saturday that Mr. Karzai would discuss the Taliban's representation in Qatar, but declined to say whether the Afghan president would meet in person with Taliban representatives.
"The important thing about this visit is that President Karzai is traveling at the invitation of the emir of Qatar," he said. "They will talk about the possibility of a Taliban office in Qatar to have direct negotiations."
Taliban spokesman Zabihullah Mujahid said Taliban representatives wouldn't meet Mr. Karzai.
"Where he [Karzai] goes, whom he meets and what is on the agenda is his business, as are the issues the emir raises with Karzai," he said. "But we are not involved in their discussions, and Karzai is not going to meet Taliban representatives in Qatar."
Mr. Karzai's trip is the latest effort to foster a peace process that has yet to yield formal negotiations. The Taliban suspended contacts with the U.S. last year amid discussions about swapping Taliban detainees at Guantanamo Bay, Cuba, for a U.S. Army sergeant held captive by the insurgents. And in December, Taliban representatives met in France with members of the Northern Alliance, which fought against the Taliban until the U.S.-led invasion in 2001.
"The reason he is trying to renew the peace process is because he believes the Afghan government should be in the lead," said Shahmahmood Miakhel, Afghanistan country director for the U.S. Institute of Peace. "He is not in favor of indirect contact."
Mr. Karzai's visit to Qatar comes at a sensitive moment for Afghanistan. The clock is ticking toward the withdrawal of U.S. and international troops by the end of next year, and Mr. Karzai is due to leave office in 2014.
"If the Taliban is ready to talk to the Kabul government, it's a success" for Mr. Karzai, Mr. Miakhel added.
Adding to the uncertainty is an escalating confrontation between Afghanistan and neighboring Pakistan, which the Taliban has used as a sanctuary and an organizational base. Last month, Mr. Karzai and Pakistani President Asif Ali Zardari agreed to seek a six-month timeline to reach a peace settlement with the Taliban, but Afghan officials in recent weeks have accused Pakistan of undermining the peace process.
Prior to Mr. Karzai's departure, his spokesman, Aimal Faizi, had more sharp words for Pakistan. In a transcript released late Friday by the presidential place, Mr. Faizi said Islamabad had imposed "unacceptable" terms on Kabul as a condition for supporting peace talks.
"Pakistan doesn't currently show any interest in the peace process," he said.
Write to Nathan Hodge at nathan.hodge@wsj.com
Afghan foreign minister discuss railway construction with Tajikistan
By SAJAD - 31 Mar 2013, 1:44 pm Khaama Press
Afghan foreign minister Zalmai Rasoul on Friday discussed the construction of railway link connecting Tajikistan, Afghanistan and Turkmenistan as well as implementation of the Central Asia South Asia Electricity Transmission and Trade Project (CASA 1000) with Tajik president Emomali Rahmon.
According to the Tajik president’s official website, the sides also discussed cooperation between relevant bodies of the two countries for implementation of ambitious regional projects.
Dr. Rassoul underlined Afghanistan’s commitment to the core values and principles of the only continent-wide process of its kind to promote cooperation across Asia.
“Afghanistan particularly, fully and whole-heartedly endorses and aligns itself with the concept of ACD enhanced regional connectivity to promote trade, investment, transit, people-to-people contacts. This is a concept that lies at the heart of our own vision for a life of peaceful and mutually beneficial co-existence and cooperation with our neighbours and the broader region around us,” Dr. Rassoul said.
Dr. Rassoul added that Afghanistan’s unique place as an “Asian Roundabout” offered tremendous opportunities in all the above areas among three of Asia’s major sub-regions, namely South Asia, Central Asia/Eurasia and the Middle East/Western Asia.
“To illustrate this uniqueness, consider the fact that Afghanistan is less than a single day’s drive to two of the world’s largest economies, both of which are growing at a monumental rate,” Dr. Rassoul said. “Consider also that Afghanistan is the only dark spot in our continent’s and especially in the Heart of Asia region’s vast railway networks. Removing this dark spot by implementing existing plans to connect the railway networks of Pakistan, Iran and all Central Asian states with one another and with other sub-regions in the Asian continent and beyond will dramatically increase trade, investments and people-to-people contacts. Similarly, Afghanistan is the one missing link in connecting energy-rich Central Asia with energy-deficient South Asia through power grids and energy pipelines.”
Dr. Rassoul added that the Afghan people and government’s ongoing successful efforts to improve security, build lasting peace, strengthen state institutions and further consolidate our national sovereignty leading up to and beyond 2014 will also increasingly allow Afghanistan to contribute to regional peace, security and economic development, as well as to the ACD’s vision and goals.
Among other things, participants at this meeting agreed to the establishment of a provisional secretariat for the ACD in Kuwait until the next summit in Thailand in 2015.
They also expressed hope that a trilateral trade and transit pact that would be signed between Tajikistan, Afghanistan and Pakistan would pave the way for further expansion of trade and economic cooperation between the nations.
President Rahmon noted that Tajikistan was ready to provide assistance to Afghanistan with training of personnel for its railway and other sectors.
Pakistani Ulema chief once again urge Afghanistan to apologize
By MEENA HASEEB - 31 Mar 2013, 12:04 pm Khaama Press
Pakistani Ulema Council Chief once again emphasized that the Afghan government must apologize for accusing him of endorsing suicide bombing in Afghanistan.
While speaking during an exclusive joint debate hosted by Radio Free Europe and Radio Mashaal, Maulana Tahir Ashrafi denied endorsing suicide bombing in Afghanistan.
He said, “I have not mentioned about suicide attack. It is a propaganda against me and against my country. I will not sit-in for peace conference unless the Afghan government does not apologize from me.”
This comes as Maulana Tahir Ashrafi quoted by media agencies earlier in March said that suicide bombing is allowed in Afghanistan as long as foreign troops are present in this country.
However Maulana Tahir Ashrafi denied the reports but the allegations sparked widespread objections by the Afghan people and president Hamid Karzai.
While speaking during a joint press conference with the NATO secretary general president Karzai said, “Apparently those who are encouraging and supporting terrorism and kill ordinary Afghan people including men and children should be added to the blacklist. This a violation of the human dignity to kill women and children.”
Afghan officials have long been accusing Pakistan for supporting militants in Afghanistan but Islamabad has repeatedly denied the allegations.
The conference of Afghan and Pakistani Ulemas was agreed during a joint trialteral summit between Afghan, Pakistani and British leaders back in February.
However Pakistan Ulemas boycotted the conference calling it a one side attack against the Taliban militants group without having any specific agenda.
In the meantime Qazi Mohammad Waqad a member of the Afghan high peace council who participated in the debate denied the allegations and said that the conference had a clear agenda but was boycotted by Maulana Tahir Ashrafi.
He said, “Maulana Tahir Ashrafi following a Fatwa endorsed the holy war by Taliban in Afghanistan and denied to participate in the conference due to the presence of foreign troops in the country.”
Mr. Waqad also insisted that the government of Afghanistan does not need to apology from anyone and only the misunderstandings should be cleared.
Nato alarm over Afghan army crisis: loss of recruits threatens security as handover looms
The IndependentBy Brian Brady, Jonathan Owen Sunday 31 March 2013
Thousands of recruits are quitting the newly formed Afghan police and armed forces every month, raising fears over their ability to protect the emerging democracy when coalition troops leave the country in less than two years' time. For every 10 new soldiers recruited to the Afghan National Army (ANA), at least three are lost because they have been sacked, captured or killed in action, new figures have revealed. British officials admit that current "attrition rates", with more than 5,000 soldiers quitting every month, threaten the force's long-term effectiveness.
The Afghan National Security Forces' (ANSF) failure to hit recruitment and retention targets is particularly troubling for Nato's International Security Assistance Force (Isaf), as the army and the police are seen as vital to preventing the return of the Taliban.
The latest British Government assessments of Afghanistan's progress towards the goals of stability and democracy confirm that the rate of recruits leaving is far worse than targets set by coalition leaders, amounting to 63,000 every year, or more than a third of the current size of the army.
The Ministry of Defence (MoD) has warned that the ANA's attrition rates "continue to represent a risk to the sustainability of the future force". The figures raise huge questions over the ability of the ANSF to reach the size regarded as necessary to take the reins before thousands of international troops leave Afghanistan by the end of next year.
The Foreign Office (FCO) has also admitted that the number of recruits exiting the ANA, the border police and the national civil order police has caused "a drain on skills".
The dispiriting details of the failure to develop a "critical mass" of ANSF recruits who can lead the fight against the Taliban come three months after The Independent on Sunday revealed that FCO officials feared the police were still "endemically corrupt" and riven with nepotism and drug abuse.
A series of internal FCO papers laid bare official concerns about the fate of Afghanistan and its chances of holding the Taliban at bay if its leaders fail to "root out corruption" throughout the ranks of the Afghan National Police (ANP).
Critics last night said they feared Isaf was heading for a "face-saving exit" from Afghanistan, leaving an army and police forces that were not yet ready to take over the security of their own country.
Shashank Joshi, of the Royal United Services Institute, said: "There is a long-term problem with attrition that has not been resolved, and I suspect the [coalition's] priority now is to salvage the mission and leave as quickly as they can. Even where the Foreign Office suggests there is an improvement in the ANSF, they can't guarantee this will continue after withdrawal because Afghan forces will no longer be able to rely on massive support from the coalition such as intelligence and airlift."
Coalition governments have spent billions developing the ANSF in an effort to create the fully staffed and trained national security forces seen as crucial if Afghanistan is to thrive as a democratic state.
But the FCO's monthly progress reports on Afghanistan revealed that the ANA and ANP missed their monthly recruiting targets in both January and February. The strength of the army stands at 175,000 – 12,000 below its projected size – while the ANP is 7,000 short of the 157,000 target set by coalition leaders.
However, the continued leaking away of soldiers and police officers who had already been tempted into the forces was another cause for alarm.
In January, the ANA's monthly attrition rate was 4.1 per cent, almost three times the target figure, although the Foreign Office maintained it was "artificially high". The rate of recruits leaving was 2.9 per cent – more than double the target – in February.
"High attrition rates within the ANA continue to represent a risk to the sustainability of the future force," the January update declared. "High levels of recruitment mean that this is not enough to endanger overall growth targets, [but] it does cause a drain on skills. Isaf, Nato Training Mission-Afghanistan and the Afghan MoD recognise this and are working hard to address it."
Afghan Govt Repeats Claim of Pakistan’s ‘Unacceptable’ Demands
TOLOnews.com By Sharif Amiry Saturday, 30 March 2013
Afghanistan's Foreign Ministry on Saturday insisted that Pakistan demanded "unacceptable" conditions in exchange for its cooperation in the peace process, despite Islamabad yesterday rejecting the charge made by the Afghan presidential spokesman earlier this week.
"Unfortunately, Pakistan has changed its position in supporting a peace process in Afghanistan. When the Pakistani government understood that the peace process is being led by the Afghan government and Afghanistan's High Peace Council, it offered some conditions which are unacceptable to the Afghan government," foreign ministry spokesman Janan Mosazai said at a press briefing in Kabul.
President Hamid Karzai's spokesman Aimal Faizi was quoted by AFP on Thursday as saying that Pakistan "demanded we cut all ties to India, send army officers to Pakistan for training, and sign a strategic partnership".
Pakistan's Foreign Office spokesman on Friday rejected Faizi's comments, pointing out that it was Karzai who had proposed a bilateral Strategic Partnership Agreement – which did not include India.
"Pakistan is whole-heartedly supporting and facilitating the peace process without any conditions or preference for any particular group or party," he said.
"Pakistan did not demand that Afghanistan should 'cut all ties to India'. Pakistan has no objection or issue with Afghanistan developing relations with any country. We have only stressed that those external forces which are using the soil of Afghanistan to destabilise Pakistan should be discouraged."
Mosazai today repeated the Afghan government's claim, coinciding with the visit of Karzai to the Gulf nation Qatar for peace talks.
Karzai Saturday travelled to Qatar's capital Doha to negotiate the opening of a political office for the Taliban.
Reports have suggested that Karzai will meet with Taliban representatives, however this has not been confirmed. The Qatari government said Karzai is meeting with country officials.
"The negotiation over the opening of an office for the Taliban will be a part of a negotiation between Afghanistan's government and Qatar's government," Mohammad Fayiq Wahidi, the Qatari presidents' deputy spokesman said Saturday in a telephone interview.
While Karzai's trip to Qatar demonstrates the importance of the plan to give the Taliban a political office, others in the Afghan government question the wisdom of sidelining Pakistan from the peace process.
"I think that we cannot ignore Pakistan's role in the peace process while major Taliban commanders are living in Pakistan," Kabul MP Sayed Hussain Anwari told TOLOnews.
Earlier this week, Afghanistan cancelled a planned military exercise with Pakistan to protest a shelling into Kunar province from the Pakistan side of the border.
Protestors Block Kabul-Parwan Highway Over Civilian Deaths
TOLOnews.com By Rafi Sediqi Saturday, 30 March 2013
Kabul-Parwan highway was blocked Saturday after a number of residents from Kabul's northern district of Mir Bachakot staged a demonstration to protest the deaths of four residents allegedly killed by a police official who has gone unpunished.
The Mir Bachakot protestors claimed that fellow residents Yar Dil Nizami and three others from the Do Koh village were killed three months ago allegedly by the Civil Order Police commander Zemarai Paikan who has used his power to escape prosecution.
Another six residents were injured in the incident. Yar Dil Nizami was singled out because he headed a civil society action group.
The demonstrators were protesting the lack of action of the government in pursuing the case.
"The government has not worked to arrest the perpetrators of Yar Dil and three others. It is known that the perpetrator is the civil order police commander. We will continue to demonstrate if they not arrested," Gul Dad Nizami, the brother of Yar Dil said.
"We, the demonstrators, are residents of Do Koh village. Our only wish is the punishment of those who killed in the village and injured six others," one of the protestors told TOLOnews.
The Ministry of Interior (MOI) Saturday told said that the investigation was in the hands of the Attorney General.
"The delegation who was appointed by the Interior Ministry completed the investigation and sent it to the Attorney General. We that the Attorney General announces its decision as soon as possible," MOI deputy spokesman Najibullah Nikzad said.
The demonstration caused problems for others in the area and those seeking to travel on the highway.
"We have been waiting for several hours for the highway to be opened. The way is blocked because of a demonstration and creating lots of problems. We are going to Parwan province," Parwan resident Shirin Aqa told TOLOnews.
Helmand Tops List of Drug Smuggling Provinces
TOLOnews.com By Haseeb Maudoodi Saturday, 30 March 2013
Helmand province had the highest number of drug smuggling cases last year out of Afghanistan's 34 provinces with 17.9 percent of all cases coming from the southern province, according to the annual report of Counter Narcotics Justice Centre.
From March 2011 to March 2012 (Persian year 1391), the total number of drug trafficking cases in Afghanistan dropped to 590, compared to the previous corresponding period of 635 cases.
Southern Kandahar province and central Kabul province followed Helmand for the highest rates of drug smuggling cases, while Paktika, Bamiyan, and Badghis had the lowest number of cases, the report said.
According to the US-funded centre, in 1391 security forces netted a total of 4101 kilograms of heroin, 36,429kg of morphine, 71,621kg of opium, 120,515kg of hashish, 46,327kg of solid chemical materials, 29,322 litres of liquid materials, and 42,771 litres of alcoholic drinks.
Around 647 persons were arrested for smuggling drugs, weapons, money, or vehicles, it added.
"The Counter-Narcotics Justice Centre alone cannot fight the phenomena, therefore every organisation needs to understand its responsibility and endeavor to obliterate drugs," said Yar Mohammad Hussainkhel, general director of special attorney for Counter Narcotics.
According to the officials, those captured smuggling drugs were not only Afghans citizens – at least nine were citizens of Iran and three were from Pakistan.
"These foreigners disturb Afghanistan's social system, therefore they should be punished according to our laws, and not returned to their countries," said Ahmad Khalid Mowahed, the centre's spokesman told TOLOnews.
Afghanistan is said to be the largest producer of drugs across the globe, responsible for around 90 percent of the world's opiates.
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