Afghanistan Compliance Advisory – Issue #26
10 February 2018

 

His Excellency Mr. Eklil Ahmad Hakimi, the Minister of Finance of the Islamic Republic of Afghanistan, has approved a wonderful new streamlined procedure for the Afghanistan Revenue Department (ARD), Tax Exemptions and Rulings Directorate to be able to review Tax Exemption Confirmation (TEC) Applications, without the need for a complete or redacted copy of the contract for both prime and subcontractors performing under the U.S. Department of Defense (DOD) Bilateral Security Agreement (BSA) or NATO Status of Forces Agreement (SOFA).

Previously, a Request Letter was required from the Contracting Officer, along with a complete or redacted copy of the contract for which a TEC was being requested. The Ministry of Finance (MOF) has approved a new form called the ARD NATO/US Contractor Supplementary Form, available to download https://ahg.af/aca/. This form replaces the requirement for a Request Letter and contract copy.

 

  1. The Contractor/Subcontractor is responsible for filling out the form and signing it.
  2. The Contractor/Subcontractor forwards the form to the awarding Contracting Office, who will verify the information and sign.
  3. The awarding Contracting Office will forward the form (scanned copy is authorized) to the Resolute Support (RS) International Agreements Branch (IAB) and Customs Coordination Cell (CCC), who will confirm the contract data via the DOD Synchronized Pre-deployment & Operational Tracker (SPOT)
  4. If there are no conflicting data points, RS IAB CCC will endorse the form with a Golden Seal, initial and date.
  5. If there are conflicting data points, RS IAB CCC will contact the awarding Contracting Office to clarify discrepancies.
  6. RS IAB CCC will notify the awarding Contract Office that the form has been endorsed and request the Contracting Office to notify the Contractor/Sub-Contractor to coordinate with RS IAB CCC for pickup at RS Headquarters, Kabul, Afghanistan.
  7. The Contractor/Subcontractor (or agent) will pickup and submit to the ARD as part of the Contractor/Subcontractor’s TEC application.

 

A gentle reminder that many companies incorrectly assume that they can wait until a business license is expired to renew it, without realizing there are monthly, quarterly and annual tax filing requirements along the way. These mandatory filings are required even if all of your contracts are tax exempt, or even if you have no activity in Afghanistan at all. A tax clearance letter from the MOF is required for business license renewal, changes or closure. This process can take several months to complete, so please plan well ahead of your license expiry date. Obtaining new visas or renewing visas requires an active business license, as do certain pre-deployment training programs, base access requests, and even bid proposals.
For those new to Afghan compliance, previous issues of this advisory and relevant documents are available at https://ahg.af/aca/.

To subscribe to this advisory, please click here. For more information, quotations or questions about any of the above, please email info@ahg.af.

 
 

Gas Pipeline Status.

 The Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline has reached Afghanistan’s border with Turkmenistan and construction will begin shortly through Afghanistan onwards to Pakistan.

 

Mining License Framework. 

The Afghan Government has completed the development of a new Mining License Framework whereby all mining permits will be reviewed by the National Procurement Authority (NPA) and the High Economic Commission (HEC).

 

National Identification Cards.

 Only about 30% of Afghan citizens currently hold valid National Identification Papers (Tazkira) which can easily be forged and are not easily verified. The Afghan Government is expected to shortly roll out electronic National Identification Cards (eTazkiras) which would dramatically improve administration, credit, security and record keeping across all sectors of the economy.

 

State Owned Enterprise Financial Systems. 

The Afghan Government is working to install for the first time computerized financial management systems across all State Owned Enterprises to increase their financial transparency, efficiency and accountability. The systems would reduce Afghan taxpayer fund waste, fraud and abuse while increasing productivity and sustainability, thereby supporting possibilities for SOE privatization.

 

One Stop Shop for Exports. 

To assist exporters to utilize air corridors (so far with India and Indonesia), the Afghan Government has reduced outbound customs clearance steps from 29 to 14. The new One Stop Shop office at Hamid Karzai International Airport assists to reduce delays and costs for exporting from the country by bringing 7 government entities under one roof.

 

One Stop Shop for Licensing. 

The Afghan Government has started assembling licensing representatives from applicable line ministries into the Afghanistan Central Business Registry (ACBR). The goal is to be able to obtain any type of private sector license at a singular location by bringing 17 government entities under one roof.

 

Document Authentications. 

The Afghan Government will start directly accepting documents issued by the foreign country’s Ministry of Commerce, licensing authority or Chamber of Commerce, without having to have the Afghan Embassy, Ministry of Foreign Affairs (MOFA) Consular Section in Kabul and MOFA Economic Section further process, or receive an additional letter of introduction from foreign country’s Embassy in Afghanistan.

 

For those new to Afghan compliance, previous issues of this advisory and relevant documents are available at https://ahg.af/aca/.

To subscribe to this advisory, please click here. For more information, quotations or questions about any of the above, please email info@ahg.af.

 

 

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