Taxes, Zakat and Drugs: How are the Taliban rulers in Afghanistan running their country's economy?

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During the last one and a half years, not only human rights, especially women's rights, have been declining in Afghanistan, but since the Taliban took power in July 2021, the country's economic situation has also deteriorated.

According to World Bank data, Afghanistan is one of the poorest countries in the world with a GDP of $368 million.

Almost half of the country's population, i.e. more than 40 million people, face malnutrition. This figure is the highest in the world. According to the United Nations World Food Program, the number of people suffering from malnutrition in Afghanistan has increased by 11 percent compared to last year.

The reduction in foreign aid, natural disasters like earthquakes and floods and the wave of global inflation are the factors that have further increased the severity of the economic crisis in Afghanistan.

The decision by the United States to freeze the assets of the Central Bank of Afghanistan after international sanctions of about 10 billion dollars also had negative effects.

In such a situation, the Taliban government is relying on some old and some new sources to run the economy.

'Tax Collection Week'

Since coming to power, the Taliban government has started collecting more taxes.

Canadian researcher Graeme Smith told the BBC that the Taliban had gained control over the whole of Afghanistan, which no one else had been able to do for decades, and that this had helped them collect more taxes.

According to the World Bank, from December 2021 to October 2022, the Taliban government collected more than one and a half billion dollars in taxes, which is more than the taxes collected in the same period of two years before that.

Border control is important in this regard, from where 69 percent of the total tax was collected in 2022. Earlier this amount of tax used to be around half.

Graeme Smith says that the customs sector has become an important source of income for the Taliban government.

Ali Hosseini is an Afghan journalist. They say the Taliban now have full control over all government offices and border crossings and can collect various types of taxes, especially taxes on imports.

Afghanistan is dependent on imports due to climatic conditions and underdevelopment of agriculture and industrial sector in the country.

Ali Hussaini believes that the Taliban are stricter on taxes than the country's previous rulers.

"Earlier, money used to go into people's pockets, but now corruption has reduced and more of the tax goes to the government."

The Taliban government has also started the practice of celebrating tax collection week across the country.

Usher and Zakat:

In addition to traditional taxes, the Taliban also levy religious taxes called Ushar and Zakat (Zakat).

Even before assuming power in 2021, the Taliban used to collect this tax from the areas under their influence.

Ali Hussaini says that each person gives one-fifth of their wealth to the government, and although exact figures are not available, it amounts to a large amount because 99 percent of Afghan citizens are Muslim, and they follow the Islamic practice of giving zakat to the government. It has to be observed.

Graeme Smith says that it is difficult to determine the amount of tax collected from usher and zakat.

They say that the Taliban do not have transparency in their financial affairs, so we do not know anything.

Minerals:

Mineral wealth such as coal, oil, natural gas, copper and precious stones are abundant in Afghanistan.

The total value of these resources has been estimated by the experts of the US Department of Defense to be about one trillion dollars.

However, the process of extracting them requires a lot of capital in terms of machinery and transport and due to political instability in the country, external investment in this sector has not been possible.

Graeme Smith says it looks like this wealth will remain underground for the foreseeable future.

He says, 'If you want to take gold and copper out of Afghanistan, you have to build a railway system, which requires huge investment and nobody is ready to invest on such a large scale at the moment. '

Currently, Afghanistan's largest export is in the form of coal, most of which is sent to Pakistan.

In the first year of the Taliban government, coal sales increased by 20 percent, which according to government data is close to 10,000 tons per day.

According to a recent World Bank report, the increase in coal exports led to a 90 percent increase in Afghanistan's annual exports to $1.7 billion. 65 percent of it goes to Pakistan, which is also an important destination for Afghan textiles and agricultural products, while 20 percent goes to India.

As of 2021, there were 126 small mines in Afghanistan, and according to the Taliban's Ministry of Minerals and Oil, that number has increased by 60 a year, with several new contracts being signed.

Ali Hussaini says that several Chinese companies are negotiating with the Taliban government and there may be deals, especially for copper.

This month, the Taliban government announced that it would sign an oil deal with a Chinese company in what would be the biggest foreign deal ever.

Drugs?

Before coming to power, most of the Taliban's income came from criminal activities, including kidnapping and extortion, as well as the cultivation and sale of drugs, especially opium.

According to United Nations data, Afghanistan used to send 80 percent of the world's illicit opium.

But in April 2022, the Taliban banned opium cultivation in the country.

Opium is used to make heroin and other narcotic drugs and has been a fertile source of income for the country's corrupt rulers and officials, as well as farmers and local influential figures known as 'warlords'.

Before coming to power, the Taliban also used to get money from the sale of opium, so why did they stop doing so?

In July, the U.S. government published a report that said the Taliban government is sticking to its ban on drugs, even though it fears it will lose support from farmers and others involved in the drug trade.

However, Ali Hussaini believes that on a small scale, the Taliban are still making money from drug trafficking.

He says that although the Taliban government has banned cultivation, cultivation is still taking place and smuggling is also taking place.

In fact, eight months after the announcement of the ban, according to the report of the United Nations Office on Drugs, about two and a half million hectares of opium were cultivated.

Ali Hussaini says that the money collected from this cultivation reached the government treasury unlike the previous government.

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