News & Blogs

April 19, 2018 : Consultation Meeting on Tax Amnesty Program for NGOs and Private Sector Entities

On April 19, 2018, NAC-PP held a consulation meeting on tax amnesty for NGOs and private sector entities at APPRO’s main Office in Kabul. The meeting was organized as part of Citizen’s Forum against Corruption (CFAC ) initiative to address corruption in tax payments.

Presentations were made on the following interrelated issues:

• An overview of National Advocacy committee for Public policy (NAC-PP)
• An overview of Anti-Corruption Subcommittee and Citizen’s Forum Against Corruption (CFAC)
• Tax Amnesty Program’s Eligibility Criteria for NGOs and private sector

Sixteen civil society organizations attended this meeting: Equality for Peace and Democracy (EPD), Integrity Watch Afghanistan (IWA), Agency Coordinating Body for Afghan Relief and Development (ACBAR), Afghan Civil Society Forum-organization (ACSFo), Afghan Women’s Educational Centre (AWEC), Afghan Coordination against Corruption (AFCAC), Relief Humanitarian and Development Organization (RHDO), Hand in Hand Afghanistan, Youth Thinkers’ Society (YTS), New Message for Afghan Women (NMAO), Cordaid, Supporting Vulnerable People Organization (SVPO), Naweed Naw and Afghan Cultural Associations Joint Jerga (ACAJJ).

Overview of National Advocacy Committee for Public Policy (NAC-PP)

NAC-PP Chairperson presented the vision, mission, goal and objectives of NAC-PP as a platform to facilitate evidence based advocacy at national level with close coordination with provincial advocacy committees.

Anti-Corruption Subcommittee and Citizen’s Forum against Corruption

The objectives of the Anticorruption Subcommittee of NAC-PP were described to the participants with additional details on Citizens’ Forum against Corruption (CFAC) whose mandate is to assist civil society organizations and private sector entities in protecting themselves against corrupt practices by tax officials.

The Secretariatof NAC-PP informed the participants on how CFAC could provide support and technical assistance to those entities that wished to take advantage of the Tax Amnesty Program announced by the government. CFAC has contracted the services of a tax specialist and a legal advisor on how to go about applying for the amnesty.

Tax Amnesty Program for NGOs and Private Sector

The amnesty program is open to all taxpayers and upon successful completion of the process for this program. According to the provisions of the amnesty, a natural and legal person will be excused from the payment of 95% of penalties accrued from 2002 until the end of 2017. There are seven (7) necessary criteria for an entity to be considered eligible under the amnesty. The framework provides guidelines for taxpayers as follows:

1) If the taxpayer has submitted his financial statement, but his actual tax liability is different in initial assessment, investigation and application of tax laws from what he has reported:

• At the initial assessment step, taxpayer is obliged to pay the actual amount and the adjusted tax penalty
• While inspecting documents and tax officer finds any discrepancy between the required documents and the submitted documents, then the person can apply for this amnesty
• When applying the law and if the cases are referred for non-compliance with the tax laws
• Additional tax imposed on instances of tax evasion or concealing income

2) In case taxpayer is dissatisfied with the taxes withheld on tax forms and cases referred to courts if the tax payer gives up the dispute and settles to pay the determined tax plus any additional amounts:

• If the tax payer gives up the dispute and settles to pay the determined tax plus any additional amounts
• Following a decision by court and complaints processing unit, taxpayer is obliged to pay actual amount plus additional amounts

3) In case the taxpayer has agreed to settle taxes in instalments:

• Taxpayer can pay the actual amount with 5% of additional amount according to the amnesty
• If the penalty is left over, then the taxpayer can pay off the 5% of additional amount only
• Those taxpayers wishing to continue paying the installments, can avoid this amnesty

4) Taxpayers who did not submit financial statements from years 2002-2017:

• The taxpayer is operational and in light of the self-assessment or assessment of taxpayers offices can pay their taxes
• Inactive entities can submit their tax return forms too and proceed paying taxes according to the law

5) Taxpayers subject to penalties and/or have not fulfilled fixed tax obligations (taxes imposed on imports, contracts, exhibitions, transport of goods & customers for business purpose) based on articles specified in the tax procedures, such as failure to submit financial statements, tax forms and income disclosure can clear their taxes by using this amnesty.

6) Other situations (for example violations and non-compliance) that are mentioned in the tax law.

7) Additional taxes that are paid prior to implementation of this procedure are not subject to reimbursement.

The full guidelines of the Ministry of Finance in Dari are available here.

Open Discussion

The following key priorities were discussed:

• The need for urgent mobilization of resources and utilizing the opportunity for obtaining tax clearance from the Ministry of Finance while the amnesty is in effect.
• Taking advantage of the opportunity to utilize technical and legal advice from CFAC for CSOs to clear their outstanding taxes.
• Contradiction between the tax system in practice and the Tax Law and how this contradiction leads to cheating by tax payers or extortion by tax collectors.
• The need for entities wishing to clear their tax penalties to coordinate their efforts with CFAC so that CFAC can provide maximum support. It was also broadly agreed the higher the number of CSOs clearing their tax penalties, the more difficult for corrupt tax officials to extort by offering to act as fixers.
• The present civil society representatives shared different problems in the tax payment and assessment. The problems ranged from submission of financial statements and annual audits to non-uniform procedures of tax clearance procedures in different provinces. Some participants raised concern about the lack of consistency and uniform legal awareness within the Ministry of Finance with its departments in the provinces. For example, an organization is excused from paying taxes, holding an official letter from MoF in Kabul but the letter is accepted in some provinces while rejected in others.
• It was collectively agreed to gather and accumulate tax issues from several organizations and organize a one day workshop on Tax Law and guidelines on the tax procedures.

Key Decisions

• It is necessary to combine several tax problem cases and approach MoF as a group. Collective voice and critical mass would be the two necessary success conditions.
• It would be the responsibility of today’s present civil society actors especially ACBAR and ACSFo as the umbrella organizations to communicate this initiative to their members and partners. The Secretariat of NAC-PP made it clear that the CFAC initiative is not only offered to NAC-PP members but all those civil society and private sector entities that have tax issues and want to take advantage the government’s Tax Amnesty Program. .
• NAC-PP Secretariat will organize a training workshop on how to apply for the amnesty.
• It was agreed that if there were repeated complaints by taxpayers about specific tax-related issues, NAC-PP will coordinate advocacy based on consultations with members of the Anticorruption Subcommittee.

Tax Amnesty Program: Technical and Legal Assistance for NGOs by Citizens’ Forum Against Corruption (CFAC)

In a press conference on Sunday, January 28, 2018 the Ministry of Finance announced a tax amnesty program through which civil society organizations and private sector entities that have not cleared their taxes and have incurred penalties for the fiscal years of 1381 through 1396 (2002-2017), may pay the original tax along with 5% of the total penalties for these years. The entities that successfully complete this process will be excused from paying the remaining 95% of the tax penalties. This amnesty program will end in September 2018.

The amnesty program offers a great opportunity for NGOs and private sector entities to operate within the bounds of law and eliminate the possibility of coercion by corrupt tax officials. At the same time, NGOs and private sector entities will contribute to efforts for transparency in tax assessment, payment, and collection processes.

CFAC will provide technical and legal assistance to NGOs and private sector entities that wish to take advantage of the tax amnesty.

Interested NGOs and private sector entities are invited to attend a consultation meeting on the tax amnesty program to discuss the details of the program and address questions from the participants.

About CFAC:

Citizens’ Forum Against Corruption (CFAC) was established in 2016 to serve as a platform through which tax paying enterprises could defend themselves against corrupt tax officials. CFAC is a part of the Subcommittee on Anti-corruption of the National Advocacy Committee for Public Policy (NAC-PP). For more information on NAC-PP, see: www.nac-pp.net

For more information on the meeting venue and date please contact: Atiq Rahimi, NAC-PP Secretariat, at atiq.rahimi@appro.org.af, with the subject line “Tax Amnesty Program”.

Advocacy Meeting With the Ministry of Education, Ministry of Public Health and Ministry of Finance

On February 20, 2018 an advocacy event was held  in Kabul with Ministries of Public Health, Education and Finance. The objective of the event was to share with national level institution specific issues  related to the health and education sectors identified by the Provincial Advocacies Committee (PACs) and National Advocacy Committee for Public Policy (NAC-PP) in Balkh, Takhar, Nangarhar, Herat and Daikundi provinces.

This coordination event was organized by Afghanistan Public Policy Organization (APPRO) as the Secretariat, of NAC-PP, Peace Training and Research Organization (PTRO) and Oxfam.

73  participants attended the event, including NAC-PP members, PAC members from Balkh, Takhar, Daikundi, Nangarhar, and Herat provinces; Provincial Councils members, provincial officials of the health and education directorates, the Director of Strategic Planning and Action of Ministry of Education, the head of the Press Department of the Ministry of Education, the head of the Provincial Budgeting Department of the Ministry of Finance, Parliament member from Takhar province, the Senior Advisor to the President in Conflict Resolution, and media.

The event was sequenced as follows:

1. Opening statement.
2. Progress report on Citizen-State project activities and their relevance.
3. Presentation of advocacy requests and recommendations for the health and education sectors.
4. Responses and positions of Ministries of Public health, Education and Finance regarding the advocacy issues presented by provincial advocacy committees (PACs)
5. Speech by the Senior Advisor to the President in Conflict Resolution regarding the presented advocacy issues.

The full report of the event and its proceedings is available here.