by Suliman Faizi

Afghanistan to Impose Taxes on Foreign Contractors

8 years ago | Posted in: Business | 410 Views

Afghanistan will impose taxes on all foreign companies in Afghanistan that make a profit and have subcontractors, Ministry of Finance officials said Tuesday.

Ministry officials point to Supreme Foodservice, which stopped making tax payments to the Afghan government after paying only for two years.

Finance Ministry Spokesman Wahid Tawhidi said Supreme, which has several subcontractors and has imported food and logistics for Nato forces worth billions of dollars, has only paid $20 million in taxes in those two years.

Supreme says material imported to support Nato troops are exempt from taxes or customs fees.

Washington shares Supreme’s view, a position that has put it at odds with the Afghan government trying to boost its revenues in an attempt to ween itself off foreign aid.

The Afghan Foreign and Finance Ministers are “pursuing” a court case with Gen. John Allen, commander of Nato forces in Afghanistan, about Supreme’s exemption. The case could have widespread repercussions for other foreign contractors.

“We claim that the company [Supreme] has subcontractors and must pay taxes to the government of Afghanistan,” Tawhidi said.

He added that the results of the court case are expected within the next few weeks.

“If Supreme is exempted from paying taxes to Afghanistan, the company should get rid of its subcontractors; otherwise, the company should pay taxes to Afghanistan, which will be more than AFN10 billion (about $200 million),” he added.

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