Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 117

Article in Press

Corporate income tax (CIT) collection in large taxpayer office Afghanistan revenue department current status and economic growth for improvement

NAWAZ RAB

  •  Received: 24 April 2017
  •  Accepted: 15 September 2017
The purpose of this study is to explore the current status of the collection of Corporate Income Tax (CIT) in the Large Taxpayer Office of the Afghanistan Revenue Department (ARD) as well as suggestions for future improvement. Also, certain aspects of social and economic development in Afghanistan during the recent years would also be covered in the discussions due to their contributing effects on the current status. The impact brought about by raising the tax collection on pivotal social issues arising alongside with the Afghan governance transition including poverty, employment, and inflation rate and so on, which is either directly or indirectly, is purposed to be analyzed. Tax collection is major source of our domestic income and hence critical to the well-functioning of the state. In 2005, the Afghan Government initiated a tax reform that resulted in healthy increase in revenue collection by 23.5%, 26.1% and 40.3% respectively in fiscal year 2011/12, 2010/11 and 2009/10, in which the ratio of CIT is only 2.5% of total revenues measured in the 2010 year and 1.3% in 2011. As the objective is to make feasible suggestions for future improvement on CIT collection in the LTO, The current thesis focuses on issues that hinder the assessment and collection of CIT and possible remedies in order to overcome these obstacles. Also, as by product, it shall highlight other important factors to increase tax collection, which is of crucial importance to the revenue performance of the Ministry of Finance of Afghanistan. Afghanistan Revenue Department (ARD) consists of three offices the LTO, (maintaining Larger taxpayers with turnover more than 75 million Afghani), MTO (maintaining medium taxpayers with turnover 3 million Afghani to 75 million Afghani), and STO, (maintaining small taxpayers with turnover less than 3 million Afghani). The large Taxpayer Office currently consists of over almost 400 economic entities with an annual turnover of AFN 75 million. Large taxpayers are divided into 13 different sectors and contribute the majority of revenue types across the three tax administration offices7. LTO is a complex organization dealing with the larger and more complicated corporate groups. Their economic and budgetary impacts are significant for the country.

Keywords: Corporate income tax (CIT) collection in large taxpayer office Afghanistan revenue department current status and economic growth for improvement