Latif, Lyla (2019) The tax collection capacity of Afghanistan : an answer in the light of rampant tax evasion practices. Kardan Journal of Law, 1 (1). pp. 144-169. doi:10.31841/KJL.2021.8

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Abstract

Afghanistan has taken a number of measures to combat tax evasion, however, they have not led to strengthening tax compliance in the country. This is due to the prevalence of economic crimes and the weaknesses in the state’s tax model. This article argues that these problems present the greatest hurdle in Afghanistan's quest towards a tax compliant society. By considering Kabul and Kandahar as its case study provinces, the article employs several methods to investigate tax evasion practices in the two provinces. In doing so, twelve indicators were developed as constructs to identify instances of tax evasion. The intention of this article is not to provide a comprehensive overview of estimates of every tax evasion component, nor of every tax evasion channel, but to specifically identify the common tax evasion practices in the two provinces. The findings suggest that as a result of the hierarchisation of the Afghan tribal society, the state co-opted tribal leaders and appointed them as local representatives, in charge of gathering taxes and duties from fellow tribesmen. This, the interviews revealed, has resulted in an obstacle for the state as the only sovereign with the monopoly to collect tax. Particularly in instances where the tribal leaders go far beyond their duty to collect tax and not remit it to the state. The resulting fragmented political structure that sits between local tribal leaders and state institutions have made it difficult for the Afghan government to get the local communities to remit taxes. Interviews with government officers, individuals and corporations in Kabul and Kandahar confirm that the rise of the underground economy due to poverty, warlord directives, contest between state and tribal leadership and insecurity has contributed to high incidences of smuggling, trade in narcotics, corruption, and money laundering. Political interference further prevents full disclosure on transactions and weak implementation of reporting standards.

Item Type:	Journal Article
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HG Finance H Social Sciences > HJ Public Finance H Social Sciences > HN Social history and conditions. Social problems. Social reform J Political Science > JQ Political institutions (Asia, Africa, Australia, Pacific Area, etc.) K Law [Moys] > KT Asia and Pacific
Divisions:	Faculty of Social Sciences > School of Law
Library of Congress Subject Headings (LCSH):	Tax collection -- Afghanistan, Tax collection -- Corrupt practices -- Afghanistan, Tax collection -- Law and legislation -- Afghanistan, Taxpayer compliance -- Afghanistan, Tax evasion -- Law and legislation -- Afghanistan , Informal sector (Economics) -- Taxation -- Law and legislation -- Afghanistan, Afghanistan -- Economic conditions, Afghanistan -- Politics and government
Journal or Publication Title:	Kardan Journal of Law
Publisher:	Kardan University
Official Date:	2019
Dates:	Date Event 2019 Published 10 December 2019 Accepted
Volume:	1
Number:	1
Page Range:	pp. 144-169
DOI:	10.31841/KJL.2021.8
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access (Creative Commons)
Copyright Holders:	©2019 Kardan University
Date of first compliant deposit:	15 September 2021
Date of first compliant Open Access:	16 September 2021
Related URLs:	Publisher

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