Small businesses in Afghanistan do not have to pay a tax penalty and residual tax
The Taliban government, which illegally seized power in Afghanistan, canceled the tax penalty. Now small businesses can avoid paying old debts. In addition, the authorities promise to reduce taxes to 0.5%, previously the rate was 1.5%.
It should be noted that in 2011 the residual tax and tax penalty were at 100%, in the period from 2012 to 2016 the residual tax was reduced to 50%, and the penalty remained unchanged. Obligations imposed on small businesses from 2017 to 2021 will now be removed. However, in order to do so, company representatives will have to reconcile all of their tax debts with the relevant ministry.
Last fall, the Taliban announced new taxes for the agricultural industry. First of all, the changes will concern the introduction of tariffs, which are transferred to support the poor. In addition, they plan to fix the land tax, which had been levied at a rate of 1 in 10. After the Taliban seizure of power introduced its own laws and new taxation options, the changes concerned members of the agricultural industry.
It should be noted that the tax in favor of the poor is a traditional Zakat tax, which is accepted in Islam. The Afghan government argues that such measures are due to the need for the country to raise the level of income. At the same time, every step of the government must comply with Islamic norms.Agriculture is one of the important points for the economy of Afghanistan, about 42% of the working population of the country is engaged in the agricultural sector. However, agriculture is experiencing difficulties, the political upheaval has been exacerbated by climate change. The country is experiencing drought and the rainy season has shifted and shortened. According to data from the World Bank, wheat production has declined by 24 percent and milk production by 30 percent in the past few years.
Between 1996 and 2001, the Taliban controlled a large share of Afghanistan and then imposed Islamic taxes. According to the illegitimate government, they were supposed to help eliminate social inequality and narrow the gap between the rich and poor.
Now that the Taliban have finally seized power in the country, representatives of the movement are actively introducing their reforms. It is difficult to say how much the innovations will help to improve the economy, for now, the state is in deep crisis. The sanctions have made the situation worse.
Last month, the illegitimate government fired cultural attachés. Positions were lost by employees of embassies in 9 countries, including the U.S., UAE, Germany, and others. The Taliban explained the decision with a change in policy and promised to appoint new attachés soon. However, most countries consider such steps as illegal, as the government of Afghanistan is not recognized internationally.