Revenue Collection and Management: A Challenge to the Afghan Government
Type: Policy Brief
26 August 2016
The economy of Afghanistan is fully dependent on international assistance and foreign aid, with 43% of Afghanistan’s general budget and 28% of its development budget subsidised by the international community (Afghanistan’s National Budget, 2014). As a result of this dependency, social or political changes both nationally and internationally can significantly impact Afghanistan’s economy. The prolonged presidential elections of 2014 and the security transition process, for example, negatively affected both the implementation of international development programmes and planned state economic activities. Afghanistan suffered a US$ 5 billion loss in 2014 as a consequence of these internal and external shocks (Afghanistan Migration Profile, 2014). This is aggravated by the fact that the government of Afghanistan has been unable to meet the country’s fiscal needs for the past thirteen years, due in large part to the absence of an effective tax management mechanism. Accordingly, the government of Afghanistan should revisit its approach to revenue management and mobilise domestic revenues more effectively to limit its dependency on international support.