Sunday, May 28, 2023

The Opium and Drug Trade Remains Vital for Taliban’s Financial Security, despite Increase in other Sources of Revenue

By Ilhamuddin Afghan* 

Most international aid dried up after the shambolic U.S. withdrawal from Afghanistan in August 2021, and the country’s reserves were frozen, leaving a revenue gap. In response to this, the Taliban tightened their grip on taxation. Despite increased efforts to collect taxes, the Taliban continue to rely on the opium and drug trade as their primary source of revenue. Even when they were an insurgent group, the Taliban relied heavily on these illegal activities as a source of income, and it appears that this continues to be the case even now after they have become the rulers. 

The Taliban have come under fire for allegedly making a large portion of their income from growing poppies and smuggling drugs. Numerous analysts allege that senior Taliban leaders are engaged in the heroin and drug trades and use these illicit activities to make money. 

According to a World Population Review (WPR) report, Afghanistan is the fourth-most violent and drug-trafficking-prone nation in 2023. The country has the 4th highest crime rate in the world, says the WPR report. Crimes in Afghanistan include corruption, assassination, drug trafficking, kidnapping, and money laundering. Only Venezuela, Papua New Guinea, and South Africa scored higher than Afghanistan in the report. Zabiullah Mujahid, a spokesman for the Taliban government, has denied the findings of the report and asserted that there has been a sharp decline in crime and criminal activity in Afghanistan. However, observers and independent analysts have viewed this claim with skepticism.

Since the Taliban retook power, the tax system has undergone significant changes, claims Haji Sharaf, a businessman in eastern Jalalabad city. Previously, businesses only had to pay one tax, but multiple taxes have since been introduced. The landowner is subject to the first kind of tax, which is on land and property. Rent taxes are the second category of tax reform. Due to increased tax obligations to the Taliban government, these changes are anticipated to have a negative effect on the local economy. Sharaf observed that while businesses used to be able to make a lot of money, most of the profits now go to the Taliban. The increase in taxes serves as evidence that the Taliban are more concerned with displaying their power and success than with the welfare of the people 

The municipality of the same city has come under criticism from Mohammad Jamal, a business owner there, for raising the costs of business licenses. He expressed concern that such high fees would have a detrimental effect on the plans of new startups. The Taliban increased the license fee from a few hundred to several thousand Afghanis, making it more difficult for new businesses to get started. Jamal further claimed that the Taliban had no concern for the general population’s financial security and were only out to make a profit. He questioned why the Taliban are in power if they plan to “drink the blood of the people.” 

Shakib, the owner of a grocery store in Kabul, believes that the Taliban’s decision to raise taxes and duties had drained people of their meagre income and made them poorer. He believes that the officials should put their efforts into giving people a comfortable life and employment opportunities. Kazim, a businessman, and another Kabul resident, also expressed concern about the effects of high taxes and fees on employment. He forewarns that, as has already begun to happen, many young people will be forced to leave the country if there are no jobs available. He notes that many young people use smuggling routes to travel to European countries, where they encounter numerous difficulties and sufferring. Shakib and Kazim recommend that to prevent further harm to the people and the nation’s economy, the Taliban needs to reevaluate its policies. 

Farmers and landlords in Afghanistan are vocal about their dissatisfaction with the Taliban’s increased levies and taxes. They also take issue with the mandated collection of Ushr and Zakat, a religious tax on grains, from their products. Ushr is a 10% harvest tax, and Zakat is a Muslim’s obligation to donate 2.5% of their income to the needy. 

A farmer from Nangarhar named Sayed Hazrat claimed that while they used to give Ushr and Zakat to the needy voluntarily in the past, the Taliban are now forcibly taking them away from them. They already pay taxes to the government, and their lives have become more difficult as a result of the tax increase and the forceful collection of Ushr and Zakat. Additionally, he mentioned that the tax on their land was low under the previous administration and that their government officials did not harass them for unpaid taxes. However, now that the Taliban are in charge, they must deal with higher taxes and forced collection of Ushr and Zakat.  

There have been recent reports of the Taliban charging both businesses and individuals in Afghanistan a variety of taxes and fees. Kabul and provincial business owners have been informed by revenue officials that they will be required to pay 1.5 years’ worth of taxes and fees all at once. Ten percent of the monthly house rent, 15% for private school students, and 20% for private university students are included in this quantum. Big businessmen must also pay taxes on capital and profits separately. In a video posted on social media, Taliban members are also seen taking sheep from farmers forcibly and claiming one out of every 40 sheep.  

The Taliban also collect taxes and duties on opium in addition to food crops. All harvests, including Ushr, Zakat, and taxes, are taken all as their fair share. While some farmers claim that the Taliban violently take their crops, others claim that the Taliban have been collecting Ushr and Zakat for a long time without resorting to violence. All these sources of revenue are not good for the economy and have a negative impact on the livelihood of the Afghans.

International financial support is crucial to rebuild Afghanistan and improve the quality of life of Afghans. It is important to create employment opportunities for the Afghan youth so that they are not pushed to extremes. To make this happen, the Taliban has to make a conscious effort to improve the situation of women and children in Afghanistan including providing them with access to education and employment opportunities.

*Mr. Afghan chooses pseudonym. He is a local journalist based in Eastern Afghanistan. 

Note:The contents of the article are of sole responsibility of the author. Afghan Diaspora Network will not be responsible for any inaccurate or incorrect statement in the article.

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