The Afghan government has doubled a business receipts tax – or BRT – over the past five years, which, according to the Afghanistan Chamber of Commerce and Investment (ACCI), has increased the prices of goods in the country.
For example, according to the ACCI, there has been an increase of Afs600 ($7.6) for a 49kg bag of flour, and the price of a 16kg bottle of ghee has increased to Afs1,300 ($16.6) from Afs700 ($8.9) over the past five years.
According to tax law, the Afghan government collects four types of taxes from taxpayers: the business receipts tax, fixed taxes, the corporate income tax (or CIT), and rent withholding tax. There hasn’t been an increase in corporate income tax and rent withholding tax, according to ACCI findings.
The ACCI deputy chief, Yunis Mohmand, said there is a need to increase employment in the job market in order to maintain a balance in increasing taxes on the taxpayers.
“An increase in taxes also impacts the common people… We want revenue to increase due to an increase in the job market, not due to an increase in taxes,” Mohmand said.
The World Bank, in a report released on Jan. 22, said that Afghanistan’s economy grew by an estimated 2.9 percent in 2019, driven mainly by "strong agricultural growth following recovery from drought," but warned that "lingering political uncertainty dampens private confidence and investment."
The report notes that as the impact of drought further recedes and private sector confidence improves following the anticipated conclusion of the presidential election, growth is expected to accelerate to 3.3 percent in 2020.
The Ministry of Finance admitted there has been an increase in taxes but said it is based on the Income Tax Law.
“When the taxes are collected, more or less, these are based on the economic or business situation of a trader or a taxpayer,” said Shamroz Khan Masjidi, a spokesman for the Ministry of Finance.
TOLOnews findings from local markets show that there has been a 35% increase in goods prices in local markets over the past five years.
“An ordinary person earns Afs250 ($3) a day. What should he buy with that? Flour? Ghee? Or other things?” asked Fazlullah, a Kabul resident.
“The prices are so high. We cannot earn an efficient amount to afford the daily needs for food or house rent,” said Hassan, a Kabul resident.