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    European Commission

    SBC (State Building Contract) – European Union:

    Date: 6 Apr, 2020

    Recommendation BenchMark Description Status Progress In 2020
    Domestic revenue mobilisation through preparation for the introduction of Value Added Tax (VAT).  a) To improve tax administration ARD issues a circular mandating e-filing for 100% of Large Taxpayers (SLTO) and selected sectors in the Medium Taxpayer Office (MTO) and the Small Taxpayer Office (STO). In Progress The SLTO currently 100% implementing the E-filling system for submission of Tax return and tax filling.
    The E-filling as well has been extended to the MTO and STO, by end of FY 1399 the MTO and STO will implement the E-filling in selected sectors of MTO and STO
    b) In preparation for the start of Value Added Tax (VAT) implementation as of the FY-2021, the Electronic VAT module is prepared by end-September 2020 and is operational by 20 December 2020.  In Progress IN NEGOTIATION STAGE WITH EU AND MOF SENIOR MANAGEMENT!
    Pubic Financial Management:
    Satisfactory progress in the implementation of reforms to improve public financial management, including domestic revenue mobilisation, and continued relevance and credibility of the reform programme.
    ­ Progress on domestic revenue mobilisation in line with the IMF revenue target through enhancing tax potential, improving compliance and reducing leakages such as through reforms of customs human resources (HR), customs enforcement, Afghanistan Revenue Department (ARD)
    – Afghanistan Customs Departments (ACD) collaboration (coordination);
    – Progress on the improvement of tax administration;
    – Progress on the reform of tax policy;
    Status It’s a Fixed trach, this benchmark under the implementation of DM Customs and Revenue in which both DGs department must to cooperate.
    The ARD Tax Administration part consist of E-filling implementation in tax offices, E-letter, establishment of VAT module and preparation for the VAT implementation.
    The ARD Tax policy consist of VAT procedures, manual, guide, rulling. Amendment of TAL manual based on TAL law, Land Tax law which already MOJ passed. Arrears tax law and development of Audt procedure from time bound perspective.
    Special Policy Dialogue Objectives (SPDOs) i) A dedicated VAT ICT Team is created in the Afghanistan Revenues Department for the effective implementation of the new VAT Module.
    ii) The VAT module specifications are prepared, including VAT E-Filing, VAT Payments and VAT Refunds.
    iii) The VAT Business Processes are updated.
    iv) A Quality Analysis on VAT module is conducted.
    v) The legal and legislative framework is for VAT introduction is revised and adjusted as needed, in line with the approved 2017 VAT Law and the 2019 VAT regulations.
    Status It's in progress:
    These are the soft targets of ARD with EU, which will support the main bechmark with the EU.

    For previous year 2019 World Bank benchmarks please click here.