Result Based Management Framework - METAC

17
D. Revenue Administration
Past Activities
Afghanistan is implementing an economic reform program with financial and TA support
from the Fund and other donor agencies. The program’s most pressing tasks involve
restoring economic stability, rebuilding key economic institutions, putting public finances
on a sustainable path, and creating the foundations for growth and the eradication of
poverty.
Afghanistan has improved its revenue performance significantly in the past few years.
Domestic tax collections by the Afghanistan Revenue Department (ARD) are
approaching half of total tax revenues. Corporate and personal income tax collections
have more than doubled in the last two years and this increase is attributable to
administrative measures to boost tax compliance.
Central to the administrative reforms have been the introduction of large and medium
taxpayer offices, which were launched with strong support from a Department for
International Development (DFID) project team which has been on the ground for a
number of years. Computerization of the Large Taxpayer Office (LTO) has been recently
introduced and enforcement of tax debts through newly enacted measures was stepped up
in 2010-11.
FAD advice is for Value-Added Tax (VAT) to be introduced with a very high registration
threshold and an initial administration through the LTO.
The FAD 2009 revenue administration mission identified a number of reform priorities
for tax and customs administration. Subsequently, METAC delivered in September 2010
its first activity in the area of customs administration, to support the Afghanistan Customs
Department (ACD) in examining options for changes to the HQ organization and to the
customs delivery structure within provinces. It also provided advice and guidance to the
Government on an evaluation of alternative governance arrangements for customs
including options for changes to the autonomy and status of the ACD within the MOF.
On the tax administration side, METAC organized in January 2011 a workshop on tax
information systems for the ARD to assist the authorities in implementing a modern
automated tax administration system. The workshop addressed the challenges brought by
the automation of tax operations and the associated changes in process change
management. Another study mission was organized in September 2012 to enable ARD
delegates to benefit from Lebanon tax department’s experience and expertise in VAT
administration preparation, during and post implementation. It was designed to support
ARD’s capacity building required for the preparation and introduction of VAT.