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AfghanistanPublicPolicyResearchOrganization

Re-conceptualizingCorruptionInAfghanistan:AnInstitutionofBadGovernance

May2017ProjectReport

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AcknowledgementsThisreportwasmadepossibleinpartthroughfundingfromtheEuropeanUnionDelegation–AfghanistanandAPPRO’sin-kindcontribution.APPROwishestoexpressitssincerethankstoallthosewhoagreedtoparticipateinthisresearch.WeareparticularlygratefulforthecriticalandconstructivecommentsondraftversionsofthisreportbyGrantMcLeodandSayedIkramAfzali.AbouttheResearchersAllresearchersatAPPROcontributed,tovaryingdegrees,toresearchdesign,datacollection,analysis,andthefinalwritingofthisreport.AboutCitizens’ForumAgainstCorruption(CFAC)Citizens’ForumAgainstCorruption(CFAC)wasestablishedinlate2015tobuildonthemomentumtofightcorruptioninAfghanistanthroughacivilsocietydriveninitiative.CFACactasaforumthroughwhichcivilsocietyorganizations,businesses,internationaldonors,andordinarycitizenscouldprotectthemselvesonlegalgroundsagainstextortionbycorruptofficialsanddemandlegislativereformandotheractionstocurbcorruption.Tothisend,CFAChasamandateto:• IdentifythecapacityneedsofNGOs,privatesectorentities,andlocalandnationalauthoritiesinconductof

goodgovernancepracticeswithafocusonanti-corruption,knowledgeofthepolicyprocess,andlegalliteracyandawarenessraisingontheutilizationoftheexistinglegislationagainstcorruption.

• Strengthencivilsociety’soversightofpolicyprocessesandgovernmentreformsonanti-corruptionwithafocusatthelocallevelthroughneeds-basedcapacitybuildinginterventions.

• Strengthenaccountability,transparency,andthuslegitimacyoflocalandnationalauthoritiesthroughinformed,pragmaticandconstructiveadvocacymessagingbycivilsociety(includingtheprivatesector)onanti-corruption,andadequateandaccountableresponsetothesemessagesfromgovernmentalauthorities.

ActivitiesofCFACareconductedthroughtheAnti-corruptionSub-committeeoftheNationalAdvocacyCommitteeforPublicPolicy(NAC-PP).FormoreinformationonCFACandNAC-PP,see:www.nac-pp.netAboutAPPROAfghanistanPublicPolicyResearchOrganization(APPRO)isanindependentsocialresearchorganizationwithamandatetopromotesocialandpolicylearningtobenefitdevelopmentandreconstructioneffortsinAfghanistanandotherlessdevelopedcountriesthroughconductingsocialscientificresearchandmonitoring,evaluations,andtrainingandmentoring.APPROisregisteredwiththeMinistryofEconomyinAfghanistanasanon-profitnon-governmentorganizationandheadquarteredinKabul,AfghanistanwithofficesinMazar-eSharif(north),Herat(west),Kandahar(south),Jalalabad(east),andBamyan(center).APPROisthefoundingmemberofAPPRO-Europe,registeredinBelgium.Formoreinformation,see:www.appro.org.afandwww.appro-europe.netContact:mail@appro.org.afPhoto:LucileMartin.Thewritingontheleftsays:“Igrewupwithhalalfood,myfatherisnotcorrupt.”Thewritingontherightsays:“Iseeyou.CorruptioncannotbehiddenfromGodandpeople’seyes.”APPROtakesfullresponsibilityforallomissionsanderrors.©2017.AfghanistanPublicPolicyResearchOrganization.Somerightsreserved.Thispublicationmaybestoredinaretrievalsystemortransmittedonlyfornon-commercialpurposesandwithwrittencredittoAPPROandlinkstoAPPRO’swebsiteatwww.appro.org.af.Anyotheruseofthispublicationrequirespriorwrittenpermission,whichmaybeobtainedbywritingto:mail@appro.org.af

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ExecutiveSummary

ThisbaselineassessmentwascarriedouttosupporttheworkofCFACandeffortsbycivilsocietyorganizations,governmentauthorities,andinternationaldonorsinanti-corruptionbyprovidingin-depthinsightsintothetaxassessment,payment,andcollectionprocessesattheRevenueDepartmentoftheMinistryofFinance,particularlyintheSmall,Medium-sized,andLargeTaxpayerOffices(STO/MTO/LTO)andmakepracticalrecommendationsonhowtocurbcorruptionintheseprocesses.Inlate2016,APPROconductedresearchinKabul,Mazar-eSharif,Herat,Kandahar,andJalalabadontheinteractionsbetweentaxpayers(NGOsandprivatesector)andtaxcollectors(mainlyMTObuttoalesserextentalsoLTOandSTO).Thisresearchwasdesignedtoestablishtheextentofpredatorycorruptionintaxassessment,payment,andcollectiontoidentifytheactors,factors,andmechanismsthatfacilitatecorruptionandtoidentitypathwaystocurbcorruptionasanecessaryconditionforgoodgovernance.Theresearchfindsthat:• Willingnesstopaybribesbytaxpayersiscomparableintermsofbeinginstitutedtothepredictable

demandbycorruptofficialsforbribestospeedthroughataxfileortoreducetheamountoftaxpayable.

• Manytaxpayingentitieswithoutpower,connection,orpatiencegiveinandthuscontributetothecorruptsystembypayingabribeorenlistingtheservicesofkomishankars(fixers)fordealingswithtaxofficials,paymentoftheirtaxes,andobtainingtaxclearances.

• ThetaxpayingentitiesresistingdemandsforbribesoraskingforlegitimateservicefromtaxofficialsriskintimidationbycorrupttaxofficersandthethreatofbeingpenalizedthenexttimeorbeingreportedtotherelevantInvestigationUnitofoneofthethreetaxoffices.

• Methodsofaskingforbribeshavebecomesimultaneouslymoreblatantandmoresophisticated.• Completionoftaxformsisanarduousandunclearprocess,withfrequentchangestothe

procedureswithoutnotifyingthetaxpayers.Tocompletetheirformsmosttaxpayersneedguidance,eitherintheformofserviceadvicefromtaxofficialsorfromtaxprofessionals.Theadvicefromthetaxofficesandprofessionalscomesatacost,however,andtypicallycontainsabribeelement,payableeitherbythetaxpayertothecorrupttaxofficialdirectly,orindirectlybythetaxprofessionalactingasthefixerforthetaxpayer.Thekeyoperatingtermintaxclearanceisjooramadan,orcomingtoanarrangement,ratherthanproper,documentedassessment,payment,collection,andissuanceofclearance.

• Thereisawidespreadviewamongtaxpayersthatmostvictimsofextortionintaxpaymentwanttocomplainandclaimtheirlegalrightsbutthattheyarediscouragedbycasesofpeoplewhohavecontestedcorruptioninthetaxassessmentandpaymentprocessesandhavesubsequentlybeensubjectedtoretaliatoryactionbythecorrupttaxofficialsthatwerethesubjectoftheircomplaints.

• Thereisstrongevidencethatmostvictimsofextortionwouldbewillingtoreportextortionbutontheconditionthattheyareprotectedfromsubsequentpersecutionbycorrupttaxofficials.

• Betterusecouldbemadeofpre-existingstructuressuchastradeassociationstocurbcorruption.Associationsexistforalltrades,representingmembersindisputeswiththegovernment,particularlyontheissueoftaxesandreformstotheTaxLaw.Inmanycases,however,assistancefromassociationstotheirmembersontaxrelatedissuestakestheformoffixingproblems,ofteninvolvingjooramadan,ratherthanchampioningordefendingtheirmembers’legalrights.

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• AwarenessoflegalprovisionsagainstcorruptionremainslowandmanytaxpayingentitiesdonotevenhavecopiesoftheTaxLawontheirpremises.Manytaxpayingentitiesalsolackproperdocumentationsystems,includingfinancialrecordkeeping,andareunableorunwillingtoprovidefulldocumentedtransactionrecordstotaxassessors.Nothavingafulldocumentationsystemmakestaxpayersvulnerabletoextortionbycorrupttaxofficials.

• Liverecordingoftaxpayer/taxcollectorinteractionsinSTO,MTO,andLTOmaybearelativelyeasytechnicalfixtodetercorruptbehaviorbybothtaxpayersandtaxofficers,increasetransparencyandaccountability,andcollectevidencetoprosecuteoffenders.Anotherdeterrentmaybethefullerdigitizationoftaxassessment,payment,andcollectionprocessestoeliminate“thehumanfactor”frommonetarytransactionsinpaymentandcollectionoftaxes.

Fightingcorruptioninothercontextsclearlyshowsthatcorruptioncannotandmustnotbeviewedasmerelyatechnicalproblemthatcanbefixedbycapacitybuilding,equipmentsupport,orlegislation.Fightingcorruptionhastobeamulti-prong,multi-actorintervention,adequatelyresourced,andlongtermoriented.Assuch,fightingcorruptionnecessitatesaseachange,drivenbytechnicalintervention,ongoingdialogue,re-educationaimedatculturalchange,civilsocietypushandparticipation,committedandresponsivestateauthoritiesand,inthecaseofAfghanistan,committedinternationaldonorsinactionaswellaswords.

Recommendations

UnderstandCorruption,ItsDrivers,andManifestations:Thereisdearthofknowledgeonpreciselywhereandhowcorruptionoperatesandsustainsitself.Thereisalsoapoorunderstandingofexactlyhowcorruptionunderminestheeconomyandthuspoliticalstability.Appendix1outlinesanumberofareasrequiringin-depth,ongoingresearch.Effortsshouldbemadebythegovernmentanditsinternationaldonorstocommissionresearchintotheseandotherareastofeedintoamuchneededknowledgebaseoncorruptionandwaystocurbit.MainstreamAnti-corruption:Organizemulti-stakeholderpubliceventsontheseriousnessofcorruptioninAfghanistanandhowcorruptionsunderminesnationalsecurity.AppealtoIslamicprinciplestoargueagainstcorruption.Alertmediatotheproblemofcorruptionintaxpaymentandtaxcollectionandlinktheproblemtothegeneralconcernaboutinsecurityandlawlessness.Raisegeneralawarenessabouteverydaycorruptionbywhatevermeansnecessary,frombillboardmessagingtograffitiinpublicplacesandanti-corruptionteachinginearlyandmiddleeducation.SetupIndependentComplaintMechanism:Setupanon-government,non-profit,independentandresponsivecomplaintmechanismforreportingcorruptionanonymously,staffedbyprofessionalsdrawnfromtheaccountingprofessionandcivilsocietyonarotatingbasis.Regularmonthlyorquarterlyreportsofthesecomplaintscouldbeusedtoinformgovernmentactiononanti-corruption.EstablishaClassofProfessional,IndependentTaxConsultants:Sincetaxpayershavelittletimetogothroughthecomplicatedprocessofcompletingforms,evenindigitizedform,andpreparingsupportdocumentation,thereissubstantialdemandforprofessionaltaxconsultantsandkomishankarswhocoulddothisonbehalfofthetaxpayer.Giventhedamagingroleplayedbykomishankarsandunregulatedconsultantsinsustainingcorruptioninthetaxoffices,effortsshouldbemadetoeliminatekomishankarsandunregulatedconsultantsandreplacethemwithqualified,independent,andlicensed

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taxconsultants.Thiswouldbeparticularlyeffectiveifcoupledwithdigitalizedtaxformstobecompletedonlinebythetaxpayers.EstablishProfessionalAccreditationandProcessesforTaxOfficePersonnel:Endnepotisticappointmentsatthethreetaxofficesandappointnewofficersbasedonqualificationandmerit.Appointmentsshouldbemadewithoversightfromindependent,civilsociety-basedbodies.Enforcestrictseparationofdutiesbetweentaxassessment,proceduraladvice,andtaxcollectionfunctions.ScrutinizeAssets-IncomeRatioofPublicOfficials:Establishasystemofannualtotalassetdeclarationforalltaxofficepersonnelastheconditionofcontinuingemployment.Takeaction,startingwithincomesourceverification,onthoseofficerswhohaveamassedassetandmoneyaboveandbeyondtheiraccumulatedsalaries.SetUpAnti-corruptionViceSquad:Thevicesquadcouldbeusedformonitoringoftaxpayersandtaxofficerstoidentifybribegiversandbribetakersandtobringchargestoprosecutethem.Thepersonnelforthevicesquadmustberotatedonaregularbasistopreventcapture.SetUpRewardSystemforAnti-corruption:Taxpayersandtaxofficerswhoplayrolesinpreventingbriberyshouldberecognizedfortheirserviceandrewardedaccordingly.SimplifyandStandardizeTaxForms:Therelittleornoneedforamultiple-pagedocumentstobefilledoutbythetaxpayer.Thereisalsonojustificationforpenaltiesforincorrectlycompletingaform.Theformshouldbeshortenedandthepenaltyremoved.Inaddition,accurateproceduresandstepsforfilingtaxesatall3taxofficesmustbeestablished,usingthewrittenwordandsymbolstoensuretheilliteratecanalsofollowtheproceduresandsteps.ProvideFullAccesstoTaxLawandAmendments:AllrequestsforinformationanddocumentationbytaxofficialsmustbetiedtothelegalprovisionswithintheTaxLawanditsvariousamendments.Incasesofdisagreementtheonusmustbeonthetaxofficialtoprovidelegalsupportfortherequestsfordocumentsandinformation.IncreaseTaxLawLiteracy:ConsiderationneedstobegiventoMinistryofFinance-supportedinitiativesonTaxLawliteracywithafocusonthelegalrequirementsandtherightsandobligationsofthetaxpayers.Suchinitiativeswouldworkbestifcarriedoutinclosecollaborationwithtaxpayers’groupsandbusinessassociations.AddressNeedsofSmallBusinesses:Particularattentionshouldbepaidtohowtotaxmicroandsmallbusinesseswhichtypicallylackrecordsoftheirtransactions,havelittleornoliteracyorbusinessmanagementsystems,andthusareatthemercyofpredatingtaxofficialswhocouldrequestarbitraryamountsastaxespayable.Smallandmicrobusinessesfallingintothiscategoryincludeshopkeepers,mechanics,orsmallrestaurants.MakeEfficientandEffectiveUseofDigitization:Thereisnoreasonfornotallowingtaxpayerstocompletetheirtaxformsonlineandreceiveconfirmationastoitsstateofcompletion.Removingthehumanfactorinthisprocessislikelytoreduceopportunitiesformeddlingbycorrupttaxofficials.StrengthenTradeAssociations:Manysmallbusinessespaytheirtaxesthroughtheirtradeassociationsthatarealsosometimesvictimsofextortionbytaxofficials.Measuresshouldbetakentoprofessionalize

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theguild-typeassociationsbytrainingthemonhowtoutilizelawstocombatcorruptionandprotecttheirmembers.Additionally,equiptheassociationswithevidencethatcouldbeusedintheirengagementwithtaxandothergovernmentauthorities,includingdifferentformsofadvocacyandpublicawarenesscampaignsthroughthemedia.MonitorandActonTaxpayer-TaxCollectorInteractions:Asadeterrenttobriberyinitiatedbyboththetaxpayersandcorrupttaxofficials,considerinstallingcamerasthatrecordallinteractionsinSTO,MTO,andLTOandkeeptherecordsforatleastonemonth.AdoptInternationalAnti-corruptionStandardsforGovernmentTransactions:WiththefullestablishmentoftheNationalProcurementAuthorityinAfghanistanwithamandatetoinstituteacosteffectiveandtransparentprocurementsystemtocontrolpublicexpenditureanddecreasecorruption,thereisauniqueopportunityfortheGovernmentofAfghanistantoleadbyexampleandadoptISO37001,guidanceforestablishing,implementing,maintaining,reviewingandimprovingananti-briberymanagementsystem.

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TableofContents

ExecutiveSummary................................................................................................................2Recommendations............................................................................................................................3

Background............................................................................................................................7

AboutThisReport..................................................................................................................9

ResearchObjectivesandMethodology..................................................................................10

LiteratureOnCorruption:ASynthesis...................................................................................11KeyChallengesinFightingCorruption.............................................................................................13CultureandCorruption...................................................................................................................14

CorruptioninAfghanistan:CurrentStatus.............................................................................16CorruptioninTaxAssessment,Payment,andCollection.................................................................18

AnalysisofEmpiricalData.....................................................................................................19

SurveyFindings.....................................................................................................................19

DriversofCorruption.............................................................................................................28

ConclusionandWaysForward...............................................................................................30Recommendations..........................................................................................................................32

Appendix1:AreasofResearchonAnti-corruption................................................................35

Appendix2:InterviewGuidingQuestions..............................................................................38

Appendix3:SurveyQuestionnaire........................................................................................42

Appendix4:KeyInformantCodingProtocols.........................................................................46

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Background

Inlate2010,corruptionanditsmanymanifestationsinAfghanistanbegantoemergeasacrosscuttingthemeinallresearch,evaluations,andmonitoringundertakenbyAfghanistanPublicPolicyResearchOrganization(APPRO),despitethefactthatuntilthennoneoftheprojectsbyAPPROhadhadafocusoncorruption.Itsoonbecameapparentthatconductingresearch,evaluation,andmonitoringwithoutpayingattentiontotherapidriseofcorruptionasadominantcrosscuttingthemewastantamounttodoingdevelopmentresearchinAfghanistanwithoutpayingattentiontogenderrelations.Asaresult,in2011,APPROstartedmakingaseriesofpresentationsonthetypesandextentofcorruptioninallfacetsoflifeinAfghanistan,thekeydriversofcorruption,andsomeofthewaysinwhichcorruptioncouldbebroughtundercontrol.Amajorinsightthatemergedincollectingevidenceonandthepoliticaleconomyofcorruptionandexploringwaysoffightingitwasthattheoveremphasisbytheinternationaldonorsand,morebroadly,thepublicthatcorruptionwasalmostentirelytheproductofgovernmentirresponsibilityandfailure–aconvictionthatwas,perhaps,misplacedandevenunfair.ArelatedinsightsuggestedthatthesteadilystableequilibriumthathademergedtoinstitutecorruptioninAfghanistanhadnotone,i.e.,agovernmentunableorunwillingtocontrolit,butfourkeypillarsthatsustainedit.Inadditiontothespreadofcorruptionwithinthegovernment,threeotherpillarssustainingendemiccorruptionneededcloserexaminationandrecognitionoftheirsignificantroles.Thesepillarswereidentifiedas:PrivateSectorandI/NGOs:willingtopaygratuitiesandbribestominimizetransactioncosts,unwillingtopressforchangeduetohavingnoeconomicincentiveandfacedwiththeriskofbeingpersecutedbyvengefulcorruptofficials,lackingaccesstoresponsivecomplaintsmakingmechanisms,andhavingalmostexclusiverelianceonkomishankars(middlemen)indealingwithtaxcollectingofficials.Itwasalsoclearlyapparentthattighteningtheadministrativegrip,andinevitablyincreasingredtape,asthemeanstocollecttaxeswaslikelytoforcethecorruptelementsintheprivatesectortowardpayingevenmorebribestoavoidthehighertransactioncosts.GeneralPublic:willingtopleasecorruptofficialsbypayingbribesandnotchallengingauthorityorexerciserighttoserviceforfearofpersecution,havinglowexpectationofassistanceorassurancefromgovernmentandformalbodies,havingageneraltendencytominimizeinteractionwithformalbodiesandavoidconflictwithauthority–apsychologicaloutcomeofyearsofconflict-inducedabusebyallformsofauthorityandtheresultanttrauma,havinglittleornohopeinthefutureandthusunwillingtoaddtothegeneralsensedesperationbymakingastanceagainstcorruption,havinglittleornoaccesstoacomplaintsmakingmechanism,andhavingnoassurancethattheywouldbeprotectediftheyresistedorcomplainedaboutcorruption.InternationalDonors:releasingstaggeringamountsofmoneyintoadysfunctionalandweakeconomythathadlittleornoabsorptivecapacityforthemassiveliquiditycreatedbytheinjectionofhardcash,particularlyintheearlyyearsafter2001.Thishyperliquiditycaused,amongotherthings,adistortionofthefactormarketsandtheemergenceofalargenumberofopportunisticventures,manyasnon-governmentorganizations(NGOs)butalsoalargenumberoffor-profitdevelopmentcontractors,tocashinontheenormoussumsofmoneybeingmadeavailableforawiderangeofserviceswithlittleornooversight.

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Itisallbutclearthatallactors,toonedegreeoranother,playaroleinperpetuatingcorruption.AfghansandinternationalsworkinginAfghanistanhavehadlittlechoicebuttosuccumbtopressureandcontributetocorruptioninacountrywheretherewas,untiltheearly2000s,atraditionofshamingthosewhowerethoughttobetakingbribes.Theoppositehasbecomethecaseinrecentyears:thosewhorefusetotakebribesarenowlookeddownuponasbeingunworthy,incompetent,orlackingcourage.Furtheranalysisofthefourpillars,i.e.,government,privatesector,generalpublic,andinternationaldonors,sustainingcorruptioninAfghanistanrevealedotherinsights,includingthefactthatanti-corruptionmadelittleornoappearanceonthepoliticalagendaofthepoliticalparties,inelections,orinadvocacyworkbycivilsocietyorganizations.Inaddition,therolemediaplayedinanti-corruptiontypicallydidnotgobeyondsensationalistexposésofsomekeyindividualsassociatedcloselywiththegovernment.Akeyconclusionfromtheanalysiswasthatpoliticalparties,media,theParliament,privatesector,andcivilsocietyorganizationscouldandshouldplayamuchmorepivotalroleinmainstreaminganti-corruptionandinitiatinganationaldialogueonhowcorruption,unimpeded,threatenednationalsecurityandunderminedreconstructionandfuturedevelopmentofAfghanistan.TheanalysisconcludedthataddressingsystemiccorruptioninAfghanistanrequired:• Explicitandcoordinatedactionbycivilsocietyorganizationsagainstcorruptioninstrategy,internal

housekeeping,anddealingswithcorruptofficialsinthegovernmentandinternationaldonoragenciesorassociates.

• Politicalpartiesplacinganti-corruptionhighontheiragendaandelectionstrategy.• Donoragenciespayingmuchcloserattentionthroughmonitoring,forexample,tohowtheirfunds

werebeingappropriated,ormisappropriated,bytherecipientsoftheirfunds.• Administrativereformtominimizetransactioncosts,particularlyintaxcollectionandbasicservice

delivery.• Linkedwithadministrativereform,therewouldneedtobewholesalereplacementoftheoldguard,

inageandhabits,withyounger,educated,andmorecommittedmaleandfemaleAfghansasthefirststepinprofessionalizingthecivilservice.

• Independent,multi-actor,civilsocietyorientedoversightofgovernmentandinternationaldonors’budgetingandexpenditure.

Achievingtheseambitiousgoalswouldneedtobebasedoncurrentempiricalevidenceonhowendemiccorruption,asadeeplyrootedsystem,evolvesinreactiontoattemptstocurbit.Theempiricalevidencewouldneedtocomefromongoingeffortsbymultipleactorstoresistandultimatelyfightcorruption,monitoringbymultiplesources,andappliedresearchexaminingdifferentformsofcorruptionandpossiblewaysforwardincurbingthem.1Duringtheperiod2013-2015,APPROpersistentlyengagedgovernmentalagencies,anti-corruptioncivilsocietyorganizations(CSOs),andmajordonororganizationsontheneedtodevelopafresh,systemicandsystematicapproachtocombatingcorruption.In2015,basedonongoingengagementwithanumberofNGOsandprivatesectorentities,ittranspiredthattherewassystemiccorruptionintax

1APPROhascompiledacomprehensivelistofatleasttenareasthatneedtoberesearchedandbetterunderstoodasthefoundationonwhichtodesignanti-corruptionprogramsinAfghanistan.SeeAppendix1.

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assessment,payment,andcollectioninvolvingNGOsandprivatesectorentities.2Furtherenquiriesrevealedthat,duetocorruptionintheassessment,payment,andcollectionprocesses,thegovernmentwasbeingcheatedoutofroughlythreequartersofwhatitcouldcollectifcorruptionintheseprocesseswereeliminated.Citizens’ForumAgainstCorruption(CFAC)wasestablishedinlate2015tobuildonthemomentumtofightcorruptioninAfghanistanthroughacivilsocietydriveninitiative.TheprimaryfocusofCFACisthesystematiccorruptionintaxassessment,payment,andcollectionprocessesinvolvingNGOs,privatesector,andtheMinistryofFinanceinKabulanditslinedepartmentsinHerat,Mazar-eSharif,Jalalabad,andKandahar.3Also,CFACwassetupwiththeexpressedintensiontoactasaforumthroughwhichcivilsocietyorganizations,businesses,internationaldonors,andordinarycitizenscouldprotectthemselvesonlegalgroundsagainstextortionbycorruptofficialsanddemandlegislativereformandotheractionstocurbcorruption.Tothisend,CFAChasamandateto:• IdentifythecapacityneedsofNGOs,privatesectorentities,andlocalandnationalauthoritiesinconductofgoodgovernancepracticeswithafocusonanti-corruption,knowledgeofthepolicyprocess,andlegalliteracyandawarenessraisingontheutilizationoftheexistinglegislationagainstcorruption.

• Strengthencivilsociety’soversightofpolicyprocessesandgovernmentreformsonanti-corruptionwithafocusatthelocallevelthroughneeds-basedcapacitybuildinginterventions.

• Strengthenaccountability,transparency,andthuslegitimacyoflocalandnationalauthoritiesthroughinformed,pragmaticandconstructiveadvocacymessagingbycivilsociety(includingtheprivatesector)onanti-corruption,andadequateandaccountableresponsetothesemessagesfromgovernmentalauthorities.

Inlate2015,APPROmanagedtosecurepartfundingfora4-yearproject(2016-2019)fromtheEuropeanUnionDelegation–Afghanistantoexaminethedynamicsofandcorruptionintaxassessment,payment,andcollectionprocesseswiththeaimofgeneratingnewinsightsandpracticalrecommendationsonhowtocombatcorruptionwithacentralrolebeingplayedbycivilsocietyincludingtheprivatesector.

AboutThisReport

ThisbaselineassessmentwascarriedouttosupporttheworkofCFACandeffortsbycivilsocietyorganizations,governmentauthorities,andinternationaldonorsinanti-corruptionbyprovidingin-depthinsightsintothetaxassessment,payment,andcollectionprocessesattheRevenueDepartmentoftheMinistryofFinance,particularlyintheSmall,Medium-sized,andLargeTaxpayerOffices(STO/MTO/LTO)andmakepracticalrecommendationsonhowtocurbcorruptionintheseprocesses.Inlate2016,APPROconductedresearchinKabul,Mazar-eSharif,Herat,Kandahar,andJalalabadontheinteractionsbetweentaxpayers(NGOsandprivatesector)andtaxcollectors(mainlyMTObuttoalesser

2Thiscorruptionwastwo-sidedinmostcases,withcorruptofficialsdemandingbribesonaregularbasiswhiletaxpayingentitieswerewillinglyofferingbribesasameanstoreducetheirtaxexpenses.

3FormoreinformationonCFAC,see:http://www.nac-pp.net/about-anti-corruption/

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extentalsoLTOandSTO).Thisresearchwasdesignedtoestablishtheextentofpredatorycorruptionintaxassessment,payment,andcollectiontoidentifytheactors,factors,andmechanismsthatfacilitatecorruptionandtoidentitypathwaystocurbcorruptionasanecessaryconditionforgoodgovernance.

ResearchObjectivesandMethodology

Thebroadaimofthisresearchistocontributetogoodgovernancethroughinformedandconstructiveadvocacybycivilsocietyonanti-corruptiontoengagelocalandnationalgovernmentauthoritiesandgaintheirsupportinfightingcorruptioninthetaxassessment,payment,andcollectionprocesses.Assuch,theresearchsoughtto:• Synthesizeavailableinformationondriversofcorruptionbasedonareviewofthebroaderanti-corruptionliterature.

• Collectandanalyzedataoninteractionsbetweentaxpayersandtaxcollectorstoestablishthekeyactors,factors,andmechanismsthatsustaincorruptionintaxpaymentsandtaxcollection.

• Generaterecommendationsonhowtoimprovetheinterfacebetweencivilsocietyandstateauthoritiesoncurbingcorruptionintaxassessment,payment,andcollectionprocessesandcontributetoeffortsforinstitutinggoodgovernanceinAfghanistan.

ThelongertermoutcomesofthisresearchandotheractivitiesrelatedtoCFACareexpectedtobe:• Identifyingandaddressingcapacityneedsofcivilsocietyandstateactorsincurbingcorruptionandcorruptpracticesthroughprofessionaltrainingandmentoring.

• Institutionalizedoversightbycivilsocietyofanti-corruptionpolicyprocessesandlegislativereformthroughtheestablishmentofacivilsocietyforum(CFAC)activeatthenationalandprovinciallevels.

• Empoweredcivilsocietytoprotectitselfagainstcorruption,takeconstructiveactiontocurbcorruptionandcorruptivepractices,andholdlocalandnationalgovernmentauthoritiesaccountable.

• Responsivenessoflocalandnationalauthoritiestoactionsonanti-corruptionbycivilsocietythroughaformalmechanismforsustainedandconstructivedialoguebetweenstateandnon-stateactorsatlocalandnationallevels.

• EstablishedsustainabilityofCFAC,throughwhichpublicandprivateinterestscanengagetocurbcorruption.

• IncreasedtaxrevenuesfortheGovernmentofAfghanistanOnehundredandeightysix(187)interviewswereheldwithkeyinformantsinKabul(37),Herat(38),Kandahar(44),Jalalabad(28),andMazar-eSharif(40).ThekeyinformantsweredrawnfromNGOs,constructioncompanies,educationserviceproviders,healthclinics,manufacturers,manufacturingserviceproviders,hotelandweddinghalloperators,utilityserviceproviderssuchasplumbersandelectricians,mediaoperators,restaurants,shops,merchants(import/export),transportationcompanies,andtravelagencies.SeeAppendix2forInterviewGuidingQuestions,Appendix3fortheSurveyQuestionnaire,andAppendix4forKeyInformantCodingProtocols.

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LiteratureOnCorruption:ASynthesis

Sincethelate1990stherehasbeenmainstreamrecognitioninternationallythatcorruptionundermineseconomicgrowthbydivertingresourcesandloweringinvestment,degradingthewelfareofthepoorestandmostvulnerablecitizensbyincreasingincomeinequalities,causingunderfundingineducationandhealthprogramsandunderminingruleoflaw,andthreateningnationalandinternationalsecuritybystrengtheningextra-stateandtransnationalcriminalorganizationsresultingindirectsupporttoterrorism-relatedactivitiesincludingarmssmuggling,drugandotherformsoftrafficking,andmoneylaundering.4Corruption,definedinitsmostpopularlyusedformasthemisuseofpublicofficeforprivategain,cannotbesimplyviewedorunderstoodasafailureofgovernment“butasafunctioningsysteminwhichrulingnetworksuseselectedleversofpowertocapturespecificrevenuestreams.”5Thissystemicviewofcorruptionalsoholdsthatcorruptionunderminesdevelopmenteffortsandgovernmentlegitimacyandeffectivenessandresultsinincreaseddistrustandindignationamongordinarycitizenssincecorruptionoftencombineswithotherriskfactorssuchasethnic,religious,andlinguisticriftsandtensions.6Onekeyimplicationofthissystemic,institutionalistviewofcorruptionisthatcorruptioncannotbetreatedonlyascriminalbehaviorbyrogueagentsdriventoservesomeprincipalbeneficiaries,ashasoftenbeenthecasewithhowdevelopmentaidinterventionshavethusfardealtwithcorruptionintheirinvolvementsinpost-andin-conflictcountriesandfragilestates.Somehavearguedthatendemiccorruptiondisplayspropertiesofakeysocial,economic,andpoliticalinstitutionwithsignificant,andresilient,structuringcapacity.Assuch,corruptioncannotbebroughtundercontrolthroughsuchmeasuresaslegislativereform,sanctions,orre-educationalone.7Widespreadandsystemiccorruptionneedstobeunderstoodandtackledbasedonananalysisofrulesetssurroundingastate’selitecomposition,eliteaccountability,degreeofcitizens’participationingovernance(broadlydefined),andmethodsofmanagingthestate’smaterialresources.8Underthecircumstancesimposedbysystemiccorruptionthestatefunctionsonthebasisofoneormultiplekleptocraticnetworksthatmaintaincontrolinthegovernmentandcapturethekeyfunctionsthroughforce,orthreatsofusingforce,bothexplicitlyanddiscreetlyagainstthosethatresistorchallengetheirrule.9Ineffect,inmanyin-conflictandfragilestates,

4See,inparticular,Collier,W.M.(2002),“Explainingcorruption:Aninstitutionalchoiceapproach.”Crime,Law&SocialChange,38:1–32andCarnegieEndowmentforInternationalPeace-CEIP(2014),Corruption:TheUnrecognizedThreattoInternationalSecurity.(Washington,DC:CarnegieEndowmentforInternationalPeace).See,also,Mauro,P.(1995),“CorruptionandGrowth.”TheQuarterlyJournalofEconomics(110:681–712);Tanzi,V.andDavoodi,H.(1997).Corruption,PublicInvestment,andGrowth,IMFWorkingPaperWP/97/139,(WashingtonDC:InternationalMonetaryFund);andTanzi,V.(1998).CorruptionAroundtheWorld:Causes,Consequences,Scope,andCures,IMFWorkingPaperWP/98/63,(WashingtonDC:InternationalMonetaryFund).

5CEIP(2014:1).See,also,Torabi,Y.(2012),OccasionalPaperNo.15,TheGrowingChallengeofCorruptioninAfghanistan:ReflectionsonaSurveyoftheAfghanPeople,Part3of4.

6See,forexample,Collier(2002)andCEIP(2014).7See,forexample,Teorel,J.(2007:1),CorruptionasanInstitution:RethinkingtheNatureandOriginsoftheGrabbingHand.QoGWorkingPaperSeries2007(5),(Göteborg:GöteborgUniversity,TheQualityofGovernmentInstitute).

8Collier(2002:14).Also,seeAppendix1forexamplesofareasthatshouldberesearchedandbetterunderstoodineffortstofightcorruption.

9Ibid.page7.

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…corruptionisthesystem.Governmentshavebeenrepurposedtoserveanobjectivethathaslittletodowithpublicadministration:thepersonalenrichmentofrulingnetworks.Andtheyachievethisaimquiteeffectively.Capacitydeficitsandotherweaknessesmaybepartofthewaythesystemfunctions,ratherthanreflectingabreakdown[emphasisinoriginal].10

Structuredkleptocracyfunctionsbasedonaverticalintegrationofnetworks,characterizedbyanelitethattakesinthelionshareofextortedorstolenfunds,andtheadditionalleviesfrombribescollectedbypettycriminalsinextortivegovernmentpositions.Thepettybribetakerspurchasetheirpositions,oftenatstaggeringprices,basedonthebribe-takingutilityofthepositionsandthecertaintyoftheprospectofpayingbackthedebtincurredtobuytheposition,throughcollectionofbribesextortedfromahaplessandincreasinglydiscontentedpublic.Inthesesituations,

Shakedownsbecomeadailyfeatureofordinarypeople’slives,ofteninflictedwithahumiliatingarrogancethataddsapsychologicaltwisttothematerialhardshipvictimssuffer.Forthoselivingunderthem,thesegovernmentsbecomeasourceoflaceratingshame.11

Forasystemicunderstandingofcorruptionasaninstitutionof(bad)governance,somehavesuggestedlayeringdifferentformsofcorruptionasfollows.Pettycorruptiontakesplaceatthelowestlevelandconsistsofbribeschanginghandsineverydayinteractionsbetweenlow-levelpublicofficialsandcitizens.Exchangesmadewithinthebureaucratichierarchytakesplaceatthenextlevel,consistingofvariousformsofembezzlementandprocurementkickbacks.Atthehighestlevelmonetaryexchangesaremadetoexertinfluenceoverpoliticalinstitutions,suchasunderminingelections,corruptingthejudicialprocessorinfluencingthenewsmedia.12Collectively,thesearrangementsstructureinteractionsatalllevelsofsocietyandthroughouttheentiresystem,completewithasetofnormsonwhatisacceptableandwhatisnotforboththeofficialsandthecitizens.Putdifferently,thereareprescriptivestatementsonhowtobecorruptthatconstitutetherulesinaction,therulesthatmakepeopleactiveparticipantswithinstableandrelativelypredictablearrangements,otherwiseknownasinstitutions.Theseinstitutionsarerecognizablepatternsorstructuresthroughwhichsocietyfunctionsandisgoverned.13Inmanyin-conflictandfragilestates,corruptionisanentiresystemofintricateprescriptionsandnorms,tangibleandintangiblearrangements,andreasonablyclearlydefinedrolesforvariousactors.Asaninstitution,corruptioncreatesstabilityforarulingelitebuiltonshakyfoundationsandlackinglegitimacyandonewhosetoppoliticalleadershipiswillingtoimplementanimplicitpolicyofofferingmonetaryandothermaterialrewardstokeepthepeacewithcontendingkleptocraticnetworksthatpresenta

10CEIP(2014:3).See,also,Torabi(2012).11CEIP(2014:8).InthecaseofAfghanistan,thereismuchanecdotalevidenceonbuyingandsellingpositionswithgoodbribe-generatingpotentials,allowingthebuyerstopaybackthepurchasepriceovertimeandfromfundsextortedfromthepublic.Teorel(2007:9-10)makesthesamepoint,citingCadot(1987).

12BasedonKarklin’s(2005:25)“typologyofcorruption”,citedinTeorel(2007:9).13Onuf,N.G.(1997).“AConstructivistManifesto,”inK.BurchandR.A.Denemark(eds.),ConstitutingInternationalPoliticalEconomy(Boulder,CO:LynneRiennerPublishers),citedinCollier(2002:11).See,also,Ostrom,E.(1999),“InstitutionalRationalChoice:AnAssessmentoftheInstitutionalistAnalysisandDevelopmentFramework,”inSabatier,P.E.(ed.),TheoriesofthePolicyProcess(Boulder,CO:WestviewPress),pp.35-71.Onthelinksbetweengovernanceandinstitutions,seeParto,S.(2015),PolicyAnalysisandInstitutionsofGovernance:Analyzing….What?,availablefrom:http://appro-europe.net/policy-analysis-and-institutions-of-governance-analyzing-what-2/

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threattotherulingelite.14Undertheseconditions,thereislittleornoroomforthevictimsintermsofrecoursetodemandjusticeortransparencysinceeveryoneinapositionofpoweriseithercorruptibleorforcedbyhigherupsinthehierarchytoactcorruptly.15Corruptioncannotandmustnotbeviewedasmerelyasymptomofadministrativeincompetenceorabuse,andfixablebyprovisionofresourcesandtransferofadministrativeskills.16Corruptionasaninstitutionofgovernancehasitspillarsinsocial,economicandpoliticalspheres.Sinceinstitutionsarebydesignresilientandresistanttochange,fightingcorruptionneedstobecontextualizedbytakingstockofthefullrangeofotherinstitutionsthatfacilitateitandconstituteitasamaturesocial,economic,andpoliticalsystem.Thenexttaskwouldbetodeterminewhetherandhowanyofthekeyfactorsandstructuresthatsustaincorruptioncouldchange,usingwhattypesofinterventionsandresources,andoverwhatperiodoftime.

KeyChallengesinFightingCorruption

Mostofthekeycharacteristicsofgoodgovernance,i.e.,accountability,transparency,ruleoflaw,responsiveness,inclusivity,effectiveness,efficiency,andparticipationhavebeenhistoricallyweakormissingfromthemodeofgovernanceinAfghanistanwhileacrosscuttingthemeunderminingeffortssince2001toinstitutetheseelementshasbeen,increasingly,systemiccorruption.Open,exploratory,andnon-defensivedialoguebetweencivilsocietyandstateauthoritiesisneededtocommittomeasuresthatcanbringcorruptionundercontrolasapre-conditionofgoodgovernanceinAfghanistan.But,thiswillbenosmallfeatoraquickfix.Itisbynowwellestablishedthatendemiccorruption,theworldover,hasthepropertiesofaself-enforcingequilibrium,completewithitsownsupportsystemofrules,actors,factors,andmechanisms.Itisalsowellestablishedthatmechanismsthatsupportrules,actors,andfactorsarecontext-specificand,assuch,overpoweringorreplacingthemrequirestailor-mademeasuresbasedonin-depthknowledgeabouttheintricaciesofthecontext.Becauseofcontextspecificity,identicalanti-corruptioninterventionsintwoormorecorruptsystemsarelikelytoyieldsignificantlydifferentresults.Thisdifferenceinoutcomesisattributedtodifferencesintheinstitutionallandscapelinkingsocial,economic,andpoliticalspheres.17Inalmostallcontexts,measurestofightcorruptiontendtobeconfinedlargelytoregulatoryreform(andeffortstoimplementit)andtechnicalcapacitybuilding.Thisisunderstandablesinceeffectinghighlevel,regulatoryreformanddeliveringcapacitybuildingtrainingarerelativelystraightforwardtasks(andconvenientlyexpensedinbudgetaryterms)astheyarefocusedoninputsanddealingwithtangibleissues–notoutcomesandimpactsthatwouldrequiremanyharder-to-budgetactivities.Themoredifficultelementsofacorruptsystem,i.e.,itssocio-culturalandeconomicinstitutions,aremuchhardertochangeeveniftheyarefullyidentifiedandinventoried,andtakeaverylongtime.Inrecognitionofthisdifficulty,somehavesuggestedthatcorruptioncouldonlybeaddressed“throughgrassrootschangesinastate’spolitical,economic,andculturalinstitutions–changesthatarenotonlytechnicalbutalsosocialinnature.”18

14BasedonRose-Ackerman(1999:82-4)andBuenodeMesquitaetal.(2003:102-3),citedinTeorel(2007:9).15Basuetal.(1992),citedinTeorel(2007:10).16See,forexample,Svensson,J.(2007),EightQuestionsAboutCorruption,JournalofEconomicPerspectives—(19:3),pp.19-42.

17See,forexample,Teorel(2007)andSvensson(2007).18SeeCollier(2002:20).See,also,Svensson(2007:34-35).

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Giventhecloseassociationmadebymanybetweenlowgovernmentwagesandcorruption,particularlyinlessdevelopedcountries,alongstandingpositionindevelopmentanalysishasbeentoargueforincreasesinwagessothatwagesareabovethecorruptofficials’“opportunitywage”asameanstomakethecorruptofficialsbehavehonestly.19Researchonthisissuesuggests,however,thatwageincentivesareeffectiveonlyundercertainconditions,andaspartofabroaderpackageofincentives.Thesimplefactisthatsometimestheopportunitywageistoohightobematchedbytheincreaseinwagesorthatanincreaseinwageswillonlystrengthenthebargainingpositionofthecorruptofficialsindemandinghigherbribes.20Otherconditions,suchasmoreeffectivelawenforcementandtransparencyandaccountabilityoffinancialinstitutions,arealsodifficulttomeetinlessdevelopedandturbulentenvironmentsgiventheinherentweaknessesinstate’slegitimacyanditsmeanstoenforcelaws,combinedwithweakand/orcorruptjudiciary,police,andfinancialinstitutions.21Thespreadofcorruption,itsdifferentmanifestations,andmagnitudehavesometimesresultedin(ill-conceived)differentiationsbetweendifferentformsofcorruptionasameanstodealwiththemostseriousofallmanifestations.Forexample,in2010theU.S.policyinAfghanistanmadeadifferentiationbetween“grandcorruption”byhigh-rankinggovernmentofficials,thepettybutwidespreadcorruptionindeliveryofbasicservicesbygovernmentandnon-governmentofficials,and“predatorycorruption”perpetratedbypoliceamongothers.22Whilemappingdifferentformsofcorruptionisinformativeabouthowthetotalsystemworkswiththepurposeofdesigningpackagesofmeasurestodealwiththem,isolatingselectedmanifestationssuchasgrandcorruptionasprioritywhileneglectingothersiscounterproductiveindefeatingcorruptionasawhole,interconnected,andfullyfunctioningsystem.Thebribeschanginghandsinpettyandpredatorycorruptionareusuallysmall,comparedtothesumsinvolvedingrandcorruption.Addedtogether,however,andgiventhewidespreadoftheseformsofcorruptioninallformsofservicedeliveryincontextssuchasAfghanistan,estimatesofthetotalbribesinpettyandpredatoryformsareputatbetween2-4billionUSD.23ThesimultaneouslychronicandacutestateofcorruptioninAfghanistananditsintricateandsophisticateddynamicshavegiventothewidespreadviewamongAfghansandinternationalobserversthatinAfghanistanthereisnowawell-established“cultureofcorruption.”Onhearingthismanyare,understandably,offendedthatsuchanegativeattributeisgiventoawholecountryanditsculture.ForabetterunderstandingofcorruptioninAfghanistan,anddevisingmeasurestobringitundercontrol,thisallegedculturalattributeneedscloserexamination.

CultureandCorruption

Cultureisanevolvingcombinationofvaluesandbeliefssharedbyethnic,religious,andsocialgroupssuchasprofessionalclassesandpoliticalpartiesinresponsetotheirphysical,economic,social,and

19BeckerandStigler(1974),citedinSvensson(2007).20Svensson(2007:32-3).ThisisparticularlythecaseinAfghanistanwhereacorruptofficerdirectlyinvolvedinhandlingtaxreturnsorcustomsdutiescanmakeupwardsof10,000USDpermonth,anopportunitywageunmatchablebyanyjustifiableincreaseinofficialwages.

21Timeandagain,therehavebeenexamplecasesoftheseweaknessesinAfghanistansince2002.22Seeforexample,AdamEntous,JulianBarnes,andSiobhanGorman,“U.S.ShiftsAfghanGraftPlan,”WallStreetJournal,September20,2010,citedinCEIP(2014:9).

23CEIP(2014:10-11).

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politicalenvironments.24Thecorevaluesandbeliefswithinaculturearelessaffectedinthisevolutionaryprocessthanthesecondaryaspects,which,incontrasttovaluesandbeliefs,tendtochangethroughlearninginresponsetonewsituationsovertime.Toillustrate,inAfghanistanthereiswidespreadbeliefthattakingorgivingbribesisagainstIslamicvalues.Whilethevaluesandthegeneralbeliefinthemremainintact,atleastinscriptureandwords,theattitudeofindividuals(i.e.,thesecondaryaspectsofthebeliefinIslamicvalues)canchangeinthecorruptindividualbasedontheopportunitytotakeorgivebribes.Thechangeinthesecondaryaspect,orday-to-dayactivity,isusuallybasedonanopportunitytotakeorgivebribesandtheneedforajustification.InAfghanistanthisjustification,particularlybythosewhoalsopubliclydisplaytheirbeliefinfundamentalIslamicprinciplesandyetareinvolvedinstealingorextortion,isghanimat(seebelow)andthushalalorpermissible.Politicalculture,asubsetofoverallculture,canassumedifferentcharacteristicsdependingonphysicalandmaterialconditionswithinanationstate.Thedescriptionof“collectivist”politicalculturesprovidesusefulinsightsforabetterunderstandingofin-conflictandfragilestates:

Collectivistculturesspawnsegregatedsocieties.Socialandeconomictransactionsincollectivistculturesareorganizedaroundsmallgroupsdefinedbyfamilial,kinship,tribal,ethnic,religious,orothersocialrelationships.Eachgrouptendstohaveitsownnarrowbaseofinterest.Paternalism,theideathatthefatherorgroupleaderdecideswhatisbestforthefamilyorgroup,isamainorganizingconcept.Intra-groupcontractenforcementincollectivistculturesisachievedthroughinformaleconomicandsocialinstitutions.Mosttransactionsincollectivistculturesarepersonal,themajorityconductedface-to-face.Loyaltytotheindividual’sgroupandmaintainingthetraditionalstatusquoaregoverningrulesofcollectivistcultures.Whilethereisstrongcooperationwithincollectivistgroups,non-cooperationismorecharacteristicoftherelationsbetweenmembersofdifferentgroups.…Citizensincollectivistpoliticalculturesinteractwiththerulingeliteintwoprimaryways.First,citizensretreatintothesafetyoftheirrespectivegroupsandexpecteitherfewservicesandbenefitsfromthegovernment,orthattherulingelite’spaternalismwillprovidefortheirneeds.Second,citizens,oftenentiregroups,establishstrongpatron-clientdependencyrelationshipswithmembersoftherulingelite.Underasystemofinformalreciprocity,theclients(citizen/group)pledgetheireconomicandpoliticalsupporttothepatrons(rulingelite)foraccesstogovernmentresources.…Politicsisconsideredaprivilegeincollectivistpoliticalculturesandthoseactiveinpoliticsareexpectedtobenefitpersonallyfromtheirefforts.Collectivistpolitiesarecentrallyorganizedwiththesmall,powerfulrulingeliteatthecentralcoreandthearrayofdifferentiatedgroupssubordinatedaround.Theruleoflawisusuallyweakincollectivistpoliticalcultures.25

Collectivistpoliticalculturesarefurthercharacterizedbyarulingelitethatcollectivelyactsas“pirates”,operatingmainlyontheillegalsideofthelawandpillagingtheirsociety’sresourcesthroughtheiraccesstopublicoffice.Undertheseconditions,corruptiontakesoverallfacetsoflifelikeaninfestation,ratherthanalocalized,adhoc,orsporadicphenomenon.26Assuch,acultureofcorruptionisbothformal,thoughperhapsmostlyhabitualandundocumented,andprevailinginthat“agentsfollowitsrulesfordecadesifnotcenturies,requiringnothingshortofagargantuaneffortoveralengthyperiod”tochangeit.27

24See,forexample,Alesina,A.andP.Giuliano(2013:4),CultureandInstitutions,NBERWorkingPaperNo.19750,availablefrom:http://www.nber.org/papers/w19750.pdf

25Collier(2002:8-9)26Alatas,H.S.(1990:5),Corruption:ItsNature,CausesandFunctions(Aldershot,England:GowerPublishingCompany),citedinCollier(2002:12).

27Collier(2002:26).Forasimilarargument,seealso:Teorel(2007:11)

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Differenttypesofcollectivistpoliticalcultureandrelatedproblemsspewdifferenttypesofsystemiccorruption,eachofwhichhasitsownvaluesandmeaningsforwhatconstitutescorruptionalonganormativecontinuumofwhite,gray,andblack.28Whitecorruptionreferstocorruptioninitsmostwidespread,systematic,andcondonedforminthatthemajorityoftheeliteandthecitizenswouldnotsupportorexpectattemptstopunishcorruptbehavior.Graycorruptionreferstosituationswheresomeelements,amongeithertheeliteorcertaingroupsofcitizens,maywanttoseecorruptbehaviorpunishedwhileothersmaynot.Blackcorruptionreferstosituationswherethemajorityconsensusofboththeeliteandcitizenscondemnscorruptbehaviorandwantsitpunished.29Basedonthistypology,Afghanistancouldbeplacedsomewhereontheborderofgrayandwhitecorruption,withcertainminorityelementsfromeliteandcitizenswantingtoseeactiontopunishcorruptionbutthatcorruptionasabehaviorandakeyinstitutionofgovernancecontinuestoholdfirmsway.

CorruptioninAfghanistan:CurrentStatus

Corruptactors,nationalandextra-national,havemadefortunesrobbingtheirfellowhumanfolkofbillionsofdollarsofaidmoneythathavebeenflowingintoAfghanistansince2001.ResearchandevaluationsbyAfghanistanPublicPolicyResearchOrganization(APPRO)andothersinAfghanistanhaverevealedtimeandagainthatcorruptionisnowaseriousthreattosocial,economic,andpoliticalstabilityofthecountry.Corruptionhasbecomepartandparcelofhowdonoraidfundsareexpensed,howordinarypeoplegoabouttheirdailylives,andhowprivatesectoractorsconducttheirbusinessactivity.Thereiscorruptionintaxation,businesslicensing,customsfeecollection,basicservicedeliveryinhealth,education,andjustice,andaccesstopublicutilitiessuchaselectricity.Allactors,toonedegreeoranother,playaroleinperpetuatingcorruption.Afghanistanisconsistentlyrankedasoneofthemostcorruptcountriesintheworld,basedonperceptionsurveysconductedbyTransparencyInternationalonaregularbasis.30NumerousstatementsbyPresidentGhaniandothershaverenewedtheurgencyofcurbingcorruptioninAfghanistan.SuchstatementsindicatethatdespiteAfghanistan’smanychallengesthereissomepoliticalwillwithinthegovernmentandamongtheinternationaldonorstomakeseriouseffortstocurbandultimatelyeliminatecorruption.Corruptionaccentuatesvariousformsofinequality,particularlyingenderrelations.Becauseofsystematicgenderinequalitywomentendtohavelowerliteracylevelsandthereforelowerknowledgeofrightsandentitlementstobasicrightsincludingaccesstoservices.Assuch,womenareatadisadvantageto“play”thesystembypayingbribesandareoftensubjectedtomistreatmentandabusebymeninpositionsofpower.Akeyoutcomeofcorruptioningenderunequalenvironmentsisthefurthermarginalizationofwomenindailylife,workplace,andpolitics.31

28ThistypologyisbasedonCollier(2002).29Ibid.30SeeTransparencyInternational,at:https://www.transparency.org/country/AFG31See,forexample,SwedishInternationalDevelopmentCooperationAgency(2015),GenderandCorruption,availablefrom:http://www.sida.se/contentassets/3a820dbd152f4fca98bacde8a8101e15/gender-and-corruption.pdfandUNDPandUNWomen(2010),Corruption,AccountabilityandGender:UnderstandingtheConnections,availablefrom:http://www.undp.org/content/dam/aplaws/publication/en/publications/womens-

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Moregenerally,asof2015,citizensweresubjectedtoatleast32differentexpressionsbycorruptofficialstoalertthemtothefactthatreceivingserviceswouldrequirethepaymentofbribes.32Theoverwhelmingmajorityofthecitizensarenotabletoresistorcontestrequestsforbribesdue,mainly,tothefactthattheyareoftenunawareoftheirfundamentalrightsorafraidofquestioningauthorityduetothefearoftheconsequences.Manycitizensforcedtopaybribesoftenfeelremorseand“sinful”butalsohelpless.Forallintentsandpurposes,corruptionisnowfullyinstitutionalizedinAfghanistan,particularlyinpettyandpredatoryforms(seeabove)butalsointheformofgrandcorruption.33ThetransferofculturefromgenerationtogenerationinAfghanistanhasbeenaffectedandshapedbynumerousinterveningeventsandshocks,includingmuchwiderandeasieravailabilityofmoneysince2001,originatingfrominternationaldonorsandgovernments.Lookedatmorecloselyandinlightoftheavailableinformationinthebroaderliteratureoncorruptionanditsinstitutionalizationinsocial,economic,andpoliticalspheres,therearevalidargumentsforreferringtocorruptionasacurrent,predominantculturalpracticeinAfghanistan,particularlyinspaceswheretherehavebeencloseinteractionandtransactionsbetweenAfghansandinternationalswithfunds.34Onekeypieceofevidenceinsupportofthispositioningofcorruptioninpresent-dayAfghanistanisthesubversionoftraditionalvaluesandmeaningstojustifytakingorgivingbribes.Toillustrate,whenconfrontedwiththechargethattakingbribesisagainsttheprinciplesofIslam,corruptofficialsandvarioustypesofprofessionalsgivethejustificationthattakingforeigners’moneyinbribesisghanimat,awartrophy,inaholywaragainstinfidelsthatapparentlyhasnotyetended.Somegivethejustificationthattheyaretakingasmuchbribeaspossiblebecause“itbelongstotheAfghanpeople.”Yetothersmaketheplainjustificationforbriberythat,givenAfghanistan’suncertainfuture,thosewithaccesstofundshavethemoralrighttotakeasmuchofitaspossiblebywhatevermeansnecessary.Overwhelmingly,publicopinionaboutadministrativecorruptioninAfghanistandoesnotagreewiththeserationalizations.WorkbyAPPROandotherorganizationsoncorruptionsince2010showsclearlythatadministrativecorruptionisseenbythevastmajorityofAfghansasself-servingandinviolationofIslamicprinciples.35Corruptionhappensbecausetheperpetratorsbenefitfromthepoliticalcultureofimpunityandthushavenofearoftheconsequencesofabusingthepublic,whilethepublichasbeenhistoricallytraumatizedbyabusiveauthorityandfeelsunprotectedifitdarestocontestdemandsbycorruptofficialsforbribesinreturnforservices.Thiscurrentcultureofcorruptionhasnot,however,alwaysbeensopresentandendemicinAfghanistan.empowerment/corruption-accountability-and-gender-understanding-the-connection/Corruption-accountability-and-gender.pdf

32ThisnumberisbasedonarollinginventorytakenannuallybyAPPRO,basedlargelyontheexperiencesofitspersonneldealingwithofficialdomforvariousneedsandpurposes.ThissectiondrawsliberallyfromapolicybriefonadministrativecorruptionintaxcollectioninAfghanistanbyAPPRO(2016),availablefrom:http://appro.org.af/policy-brief-administrative-corruption-in-tax-collection/

33ForthelateststatusongrandcorruptioninAfghanistan,seeMcLeod,G.(2016),USIPSpecialReport,“RespondingtoCorruptionandtheKabulBankCollapse.”

34See,forexample,U4Anti-CorruptionResourceCenter(2012),Lessonslearnedinfightingcorruptioninpostconflictcountries,availablefromhttp://www.u4.no/publications/lessons-learned-in-fighting-corruption-in-post-conflict-countries/

35See,forexample,IntegrityWatchAfghanistan(2016),NationalCorruptionSurvey(Kabul:IWA),availableat:https://iwaweb.org/national-corruption-corruption-survey-2016/

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CorruptioninTaxAssessment,Payment,andCollection

AkeyareaforpettyandpredatorycorruptioninAfghanistanisintheassessment,payment,andcollectionoftaxesinvolvingnon-governmentorganizations(NGOs)andprivatesectorentitiesontheonehandandtheSmall-sizedTaxpayers’Office(STO),Medium-sizedTaxpayers’Office(MTO),andLarge-sizedTaxpayers’Office(LTO)attheRevenueDepartmentoftheMinistryofFinanceontheother.Theprocessworksasfollows.STOdealswithsmallshops,restaurants,hotels,privateschools,andtrainingcentersunderacertainrevenuerate.AnyentitywithannualrevenueofoveronebillionAfghanis(approximately20millionUSD)fallsunderthemandateofLTO.36AllNGOsfallunderMTO.MTOalsodealswithprivatehospitals,clinics,universities,constructioncompanies,andotherprivatesectorbusinesseswhoseannualrevenueisoveronemillionUSD.Taxesaretypicallyaccountedforandpaidbythetaxpayingentity’sfinanceoradministrationdepartment.Entitiesalsouseintermediariessuchtaxconsultantsorfixers(kommishenkars).Fixersmakeuparound50percentoftheintermediariesdealingwithMTOonbehalfofdifferententities.FixersmaybeexternaltoMTOorinternal(asemployeesoftheMinistryofFinance).ThevastmajorityofMTOemployeesareopentoactasfixersforafee.Asignificantnumberoffixersarenottrainedorexperiencedaccountantsandactonlyasthego-betweenforasetfeeforthetaxpayercalculatedonthebasisoftheamountoftaxesowed.Thetaxpayer’sfilefirstgoestotheAdministrationDepartmentofMTO,wherethefileisregisteredinanautomatedsystem(SICTAS)andareceiptisissued.SICTASroutesthetaxfiletotherelevantdepartment.Thefileisassessedandthepreliminarytaxpayable(maaliaatebtedaayi)isconfirmedorrecalculated.Thefileisthensenttothedepartmentheadforverification.AfterverificationthefileissentuptotheGeneralDepartment,andthentotheHeadofMTO.Theinitialstagesinprocessingdirecttaxpaymentsubmissionsbyvariousentitiesarereasonablytransparent,atleastinsofarashowtheprocessisdocumented.However,therearenoformalchecklistsfortaxpayerstocomplywith,onlydifferenttypesofforms,givenoutrandomlybyMTOofficers.Thefirstsignsofabribebeingsoughtbyacorruptofficerbegintoappearwhenthetaxpayersareaskedtoresubmittheirformsbecauseofallegedoractualmistakes.TheseresubmissionscreateopportunitiesforcorruptMTOofficerstogaugethewillingnessoftheclienttolookforashortcutintheprocess,andhencetheopportunityforbribes.Withorwithoutshortcomingsinthesubmitteddocumentation,duringthelaterstagesoftheprocessvariousissuesareraisedbycorruptMTO’staxassessorsaboutmiscalculationsoromissionsinthesubmitteddocuments,alongwithexplicitsuggestionsonhowtheproblemscouldbesolvedforafeepayabletothetaxcaseofficerorafixerintroducedbythetaxcaseofficer.Theprocessoftaxassessmentisdifferentforsmallerentities,typicallyshopsandretailoutlets.Inmanyofthesecasestheentitiesarevisitedonaregularbasis(monthly,quarterly,andannually)byofficersfromSmallTaxpayers’Office(STO).Mostofthesesmallentitiesdonotkeepaccurateorfullrecordsoftheirtransactions.TaxassessmentstakeplacebythevisitingSTOofficersbasedonestimatesoftherevenuefortheperiod–notthenetincomeorprofit.ThisstageisthefirstopportunityforacorruptSTOofficertobeginnegotiationsonhowmuchbribeshouldbegivenbythesmallentity.Apredictably36Theexchangerateusedhereis:1USD=50Afghanis.In2017theexchangerateisnearerto1USD=68Afghanis.

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highestimateisgiventotheentityastaxesduesincethebaseforthecalculationistheoverestimatedtotalrevenue.Duringtheinevitablehagglingthatensuestheentityownerisgiventhechoiceofpayingaloweramountifabribeispaid,typicallyenteredintoacalculator–asopposedtobeingspokenorwrittendown–bythecorrupttaxofficer.Notcomplyingwiththeamountrequestedcanresultinretaliatorybehaviorbythecorruptofficerduringthenextvisits.Ifdissatisfiedwiththebusinessowner’scooperation,acorruptofficercouldalsosealtheshoporbusinessonthechargeofnon-compliancewithtaxpayment.37

AnalysisofEmpiricalData

Oftheentitiesinterviewed,slightlyovertwopercentwerefemaleledandoperated.Thehighestpercentagesofthekeyinformantsweremadeupofmerchants,healthclinics,educationserviceproviders,constructionfirms,andNGOs(Figure1).Figure1.PercentageShareofMainKeyInformantCategories

n=187ThekeyfindingsinthenextsectionarebasedontheanalysisoftheinterviewandsurveydatacollectedthroughinterviewswithkeyinformantsinKabul,Mazar-eSharif,Herat,Kandahar,andJalalabadduringSeptemberandNovember2016.Ofthoseinterviewedandsurveyed,83percentdealtwithMTO,tenpercentdealtwithSTO,andsevenpercentdealtwithLTO.

SurveyFindings

Theinteractionsbetweentaxpayersandtaxcollectorshavehardenedoverthelast2-4years.TheMinistryofFinancehasattemptedtotightentaxcollection,particularlyfromsmallbusinessessuchas37Thisdescriptionoftaxassessment,payment,andcollectionisbasedoninterviewswithanonymoustaxpayersandkomishankars.

31.5

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Merchants HealthClinics EducationServices Construction NGOs FemaleLed/Operated

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shopsandrestaurants,whilesmalltaxpayersbitterlycomplainaboutthearbitrarinessandunfairnessofthetaxesandthewayinwhichtheyareassessedandcollected.Bribesaregivenandtakenforavarietyofreasons.Morethanonethirdofallthosesurveyedstatedthatbribeswereofferedordemandedforspeedingthroughataxfile.Asimilarnumberofrespondentsreportthatbribesaregivenortakentoreducetaxespayablewhile17percentoftherespondentsreportthatbribesareusedtoreducetheamountofpenaltyimposedforlatenessinsubmittingtaxestotheMinistryofFinance(Figure2).Insomeinstancessmallerbusinessesfiletheirtaxesthroughtheirtradeassociation,actingastheintermediarybetweenthebusinessesandSmallTaxpayers’Office.LittleisknownabouthowthetradeassociationsdealwithSTOandMTO,however,andwhetherornottradeassociationoperatesimilarlytokomishankarsandtaxconsultants,theoverwhelmingmajorityofwhomhavepriorarrangementswithtaxofficeswithillicitpaymentsbeingmadetoreceivetaxofficeservicesincludingtaxclearances.Therearesomeindicationsthatthetradeassociationsthatdealwithtaxofficesonbehalfoftheirmembersarealsopressedtopaybribes.38Figure2.ReasonsforBriberyinTaxPaymentandTaxCollection(%)

n=187Also,asoflatethetaxofficesdonotaccepttaxassessmentssubmittedbymanysmallerentitiesonthegroundsthattheformsarenotfilledoutproperlyorthattheassessmentsarenotsufficientlyaccurate.Forexample,

AlittlewhileagoIwenttoMTOtosubmitmytaxpaymentdocumentation.Everythinghadbeendoneproperlyandwithoutanymistakes.Thetaxofficertoldmethatourdocumentationwasnotdoneproperly.TheharderItriedtogethimtotellmewhereIhaddonethingswrong,themoreinsistenthebecamethathecouldfixthe“mistakes”formeforafee.IntheendIgaveupand,sinceitwasclosetoeidholidays,Ipromisedhimanewsuitandsomehomeequipment.Thenheacceptedmypaperwork.39

Or,

38KI-M-Kab-CU-STO-6,KI-M-Kab-CU-STO-7(SeeAppendix3fortheKeyInformantCodingProtocols)39KI-M-Nan-PS-MTO-1

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Wewantedtopayourtaxesfortheyear1392andneededthetaxform.TheformgiventousbyMTOwasfrom1390.Wetoldthetaxofficerthattheformwasfromthewrongyear.Hesaidnottoworry,justcrossout1390andwrite1392initsplace.Whenwesubmittedthecompletedformanothertaxofficermadeabigfussaboutthetaxformhavingbeentamperedwithandbecausewehaddonethetamperingwehadtopayabribeof20,000Afssohewouldn’treportus.WerefusedtopayandintheendwehadtouseconnectionswehadatMTOtohelpandclearus.40

Manyshops,restaurants,clinics,andweddinghallsarevisitedbyMinistryofFinancetaxassessorsonaregularbasistobeassessedfortaxespayable.Inmanyinstancestheassessedtaxesarecollectedbytheofficersthemselveswiththetaxpayersnotknowingifthecollectedtaxesarepaidintogovernmentaccounts.41Accordingtooneinterviewee,

OurtaxesareusuallyassessedandcollectedbyMTOofficers.Theycometoourshopandjustsitthere.Thenatsomepointtheyhavethissweetexpression,jooramadan[comingtoanarrangement],thattheyusewhentheywanttomakeadealwithus,byofferingtolowertheamountoftaxowedandpayingthemratherthanthegovernment.42

Ifthereisresistancebythetaxpayingentity,theprocesscantakealongtime,costmore,andbecomeaggressivetowardthetaxpayerthatwishestoactlegitimately:

Thewaytheseofficerscometoustocollecttaxesorbribesisquiteaggressive.Theysometimesstayaroundourbusinesspremisesfor20daystointimidateusandmakesurethattheycollectabribe.Thisisdisgracefulandadiscredittothegovernment.Ifweareforcedtopaybribeslikethisandhavenochoicebuttopay,wearesacrificingourfaithinIslamandourdutytothecountry.43

Thenetresultofthisunevenprocessformanyentitieswithoutpower,connection,orpatienceistocaveintodemandsbythetaxassessorsandpayabribetogainclearanceortoenlisttheservicesofkomishankars(fixers)forthepaymentoftheirtaxesanddealingswithtaxofficials.44TwentyfourpercentofallthekeyinformantssurveyedreportedthattheyhadbeenaskedforbribeswhendealingwithLTO/MTO/STOofficers.Itmustbenoted,however,thatthispercentagewouldbemuchhigherifthe“specialfees”paidbykomishankarsandtaxconsultantsweretakenintoaccount.Alargenumberoftaxpayingentitiesoptforgoingwithakomishankarortaxconsultantasameanstolowertaxespayable(ofteninvolvingpayingabribe)andsavetime.Itiswidelyknownthatkomishankarsandtaxconsultantshavetheirownpriorarrangementswithcorrupttaxofficialsforpayingset–illicit–feestogothroughthevariousstagesoftaxassessment,taxpayment,andthefinalclearance.Thetaxpayingentitiesthatpersistanddemandtransparencyfromtaxofficialsintheassessmentoftheirtaxesandtheirpaymenttothegovernment,ratherthanthecorruptofficials,arelikelytobeintimidatedbythetaxofficerswiththethreatofbeingpenalizedthenexttimeorbeingreportedtothe

40KI-F-Kab-NG-MTO-4.SimilarexperienceswerereportedbyKI-M-Kab-PS-MTO-241KI-M-Maz-PR-MTO-142KI-M-Nan-PR-MTO-1

-CC-Nan-M-2,KI-MTO-SC-Nan-M-1,KI-MTO-SC-Nan-M-3.SimilarstatementsweremadebyKI-MTO-SC-Nan-M-KI43

MTO-2,KI-M-Nan-CU-MTO-1,KI-M-Nan-CU-MTO-2,and(inKandahar):KI-F-Kan-BW-MTO-4,KI-F-Kan-NG-MTO-4,KI-M-Kan-CC-MTO-1,KI-M-Kan-CC-MTO-2,KI-M-Kan-CU-LTO-4,KI-M-Kan-SC-MTO-4,KI-M-Kan-TC-MTO-1.

44KI-M-Nan-CU-MTO-1,KI-M-Nan-CU-MTO-2,KI-M-Nan-PS-MTO-3.SimilarstatementsweremadebykeyinformantsinKabul,Mazar-eSharif,Herat,andKandahar.

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relevanttaftish[InvestigationUnit]ofoneofthethreetaxoffices.45Similarly,thosethatseekadvicefromthetaxofficesaretakenbycorruptofficerstoquietcornerswheretheyareaskeddirectlytopaybribestohavetheirtaxproblemstakencareof.46Methodsofaskingforbribeshavebecomesimultaneouslymoreblatantandmoresophisticated.Manytaxofficerssimplyaskforafeeto“fix”tax-relatedproblemsoftaxpayers.47Inothercasesrequestsforbribesareimpliedthroughcomplicatingtheprocessforthetaxpayertothepointthatthetaxpayersurrendersandoffersabribetoberidofthetimeconsumingprocess.48Evenifthedocumentationiscomplete,thereisalwayssomethingthetaxofficersmanagetofindthatneedstoberedone,forcingthetaxpayertoredoformsorrevisitplacesalreadyvisitedfornewsignaturesandthuscausingadelaytoentrapthetaxpayerintopayingbribes.49Avarietyofdirectandindirectindicationsaremadebycorrupttaxofficerstoalertthetaxpayertopaygratuities(Table1).Table1.SampleofExpressionsUsedtoAskforBribes• Giveusshirini• Youdon’tmoveyourselfatall• Myslippersaretorn• Howmuchdoyourslippers/shoescost?• Canyoupayformynewpairofslippers/shoes?• It’sEidandIdon’thavenewclothes• Youneverhostmeasaguest[atarestaurant]• Thereisaverygoodrestaurantin[X]hotel[andyou

shouldtakemethere]• Youhavealotofincomebutwhereisourshare?• Youhavebigprojects,whereisourshare?• Youdon’tscratchyourself• Havemercy• Shareoursorrow• Whereismyshare?• Let’sgooutsideandhaveachat

• Whatismypercentage?• Buyussomephonecredit• Payforourtransportcosts• Wedidallyourpaperworkandyoudon’tgiveus

anything• YouknowwhatIneed• Whereisthemoneytocomefromtopayformeand

mycolleaguestoeat?• Getussomenicechickenforlunchbecauseweare

hungry• Getusbreakfastbecausewehaven’teaten• Whereismyfee?• IfIcompleteyourcase,what’sinitforme?• Nowit’suptoyouandyourconscience[topaygratuity]• Mymobilephonehasbecomeveryold[andIneedyou

tobuymeanewone].Source:MultiplekeyinformantsdealingwithSTO,MTOandLTOWhenaskedwhatavenueswereavailabletotaxpayerswhodidnotwanttopaybribes,manyoftherespondentsmaintainedthatthebestwayforwardwasforeverytaxpayertofillouttheformscorrectlyandnoteasilygiveupwhenbeingdelayedorintimidatedbycorruptofficials.Doingsowouldrequirehavingaccesstotechnicalandlegalexpertise,currentlyonlyavailablefromunregulatedconsultancyfirmsandindividuals,mostofwhomfunctionverysimilarlytokomishankars,includingfacilitationfortheirclientsthroughpaymentofbribestocorrupttaxofficials.Othermeasures,suchasmerit-basedappointmentsatthetaxoffices,wereseenasnecessarythoughnotimmediatelyimplementableduetothepresenceofverystrong,andsophisticated,nepotisticnetworksthatprotectcorruptofficersandofficials.Referencewasmaderepeatedlytoageneral

45KI-M-Nan-CC-MTO-1,KI-M-Nan-SC-MTO-2,KI-M-Nan-PH-LTO-5,KI-M-Nan-PH-LTO-6.Also,KI-M-Kab-TC-MTO-1,KI-M-Kab-SC-MTO-3,KI-M-Kab-NG-MTO-2,KI-M-Kab-PH-MTO-3,KI-M-Kab-PW-MTO-1,KI-M-Kab-NG-MTO-8,KI-M-Kab-NG-MTO-1,KI-M-Kab-SC-MTO-2

46KI-M-Nan-PH-LTO-647KI-M-Kab-TC-MTO-1,KI-M-Kab-SC-MTO-3,KI-M-Kab-NG-MTO-248KI-M-Maz-CC-MTO-1,confirmedbymanyotherkeyinformantsinMazar-eSharif.49KI-M-Maz-CU-MTO-3

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tendencyamongAfghanciviliansnottoconfrontauthorityasamatterofrulesincedoingsowouldhaveretaliatoryconsequencesforthecontestants.50Officialcomplaintsarerarebecause

…wecan’treportcorrupttaxofficialsbecauseallofficialdepartmentsarecorrupt.Evenifwegotothehighestleveltocomplain,hetooisinvolvedinbribetakingarrangementsandwilltellus:‘myhandsandfeetaretiedandthereisnothingIcandotohelpyou.’51

Mostintervieweesmaintain,however,thatvictimsofextortionwanttocomplainandclaimtheirlegalrightsbutthattheycontinuetobediscouragedbycasesofpeoplewhohavecomplainedandhaveforcedtopayevenhigheramountsintaxesandbribesafterretaliatoryactionbythosewhowerethesubjectoftheircomplaints.52Figure3.TaxpayerAttitudesandAction(%)

n=187Ifthecomplaintagainstacorrupttaxofficialeverreachestheformalcourt,thelikelihoodisthattherewillbenochargesagainsttheaccusedsincemostofthepersonnelatthetaxofficesarelinkedtopowerfulindividualsandwellprotected.53Somefearthatiftheygothroughthelegalchannelstomakechargesofcorruption,theyruntheriskoflosingandthenbecomingatargetofhostilitiesincludingdeaththreats.54Thesurveyresultsconfirmthattwothirdsofthoseinterviewedwouldbewillingtoreportextortionbythetaxoffices,thoughontheconditionthattheyareprotectedfrompersecution.AlmostonethirdofthoseinterviewedhavecontestedtheirassessmentswithSTO/MTO/LTOandnearlytwothirdsclaim

50KI-F-Nan-BW-MTO-1,confirmedby10otherkeyinformantsinJalalabad.

-SC-Kan-M-2,KI-MTO-SC-Kan-M-KI1,-MTO-NG-Kan-F-KI1,similarcommentsweremadeby:-MTO-BW-Kan-F-KI51

MTO-8,KI-F-Kan-BW-MTO-252KI-M-Kan-PR-MTO-253KI-M-Kan-CU-MTO-1,KI-F-Kan-NG-MTO-4confirmedbymanyothersinKandahar.

7-MTO-SC-Kan-M-3,KI-MTO-CC-Kan-M-2,KI-MTO-CC-Kan-M-1,KI-MTO-CC-Kan-M-KI3,-MTO-BW-Kan-F-KI54

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Assessments

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No(%) Yes(%)

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thattheyusetheTaxLawintheirdealingswiththetaxoffices.However,only13percentofthoseinterviewedhaveactuallyreportedcasesofcorruptionattaxoffices(Figure3).Arbitraryandabusivebehavioroftaxofficials,particularlytheonesvisitingsmallertaxpayingentities,washighlightedasamajorsourcediscomfortbythevastmajorityoftheinterviewees.55Abusivebehaviorbythetaxofficialswasattributedtogeneralignorance,arrogance,andlackofprofessionalismofcorruptofficials.Forexample:

[Thecorrupttaxofficers]aresoignorantthatwhenwearguewiththemabouttheirassessmentofourtaxespayable,theywouldsaythingslike:‘youhaveaniceprivateclinichereandlikeallprivateclinicownersyouareathiefbecauseyoutreatpeoplefortheirailmentsandyouchargethemlotsofmoney.’Howcanyoureasonwiththistypeofperson?56

Othersbelievethatageneralenvironmentofimpunityhasemboldenedcorrupttaxofficials:

Wedon’tpunishanyoneinthiscountryforbreakingthelaw.WehaveacriminalcodeandtheprovisionsofIslamicShariaonanti-corruptionbutnoonerespectsthemandnooneisinchargetomakesuretheyareimplemented.Thereislittlemonitoringonhowlawsarerespected,ifatall.Whydon’tourleadersdemandthatallemployeesoftheMinistryofFinancebeassessedfortheirassetsandthecashintheirbankaccounts?Howcananyoneexplainthefactthat,afteronlyworkingforsixmonths,ataxofficialhasabrandnewcarandanewhousecostinghundredsofthousandsofdollars?57

Therearewidelyunderstoodrulesgoverningthelevelofbribesdemandedbycorrupttaxofficers.Themosttypicalwayisforthetaxofficerstocomeupwithalargesumpayablebythetaxpayermadeupofunpaidtaxes,whichisoftentimescalculatedinquestionableways,andaccumulatedpenaltyforlatepayment.Thecorrupttaxofficerthenofferstofixthesituationifthetaxpayerpaidonlyhalfofthatamount.Ofthehalfagreedwiththetaxpayer,50percentispaidastaxestothegovernmentand50percentiskeptbythetaxofficersasthefeetofixtheproblem,meaningthatthegovernmentreceiveonlyonequarteroftaxespayable.Similarly,visitingtaxofficersdeliberatelydelaytheassessmentprocessbyspendingadisproportionateamountoftimeonthepremisesofthebusinessownerswhichdisruptsbusinessoperations,payrepeatedvisitsoverafewdaystofrustratethebusinessownerand,hence,pavethewayforadiscussiononhowmuchbribeshouldbepaidtocompletetheassessment.Forexample:

They[taxofficers]cametoourofficeanddemandedthatwebringthemallofourfinancialrecordsfortheyear.Wehadhadnopriornoticeoftheircomingtoouroffice.Wewereabitdumbstruckastowheretobegincollectingvariousdocumentsforthemtoreview.Becauseofthiswecomplainedopenlytothemaboutthelackofnoticeanddisruptingourwork.Thetaxofficerssaiditwasthelawandtheywerejustdoingtheirjob.Theywentthroughourdocuments,foundafewcaseswerewehadnotfullypaidtaxes,andgaveusabill.WepaidbutIthinktheyexpectedustoaskforanarrangementwiththemandpayless.58

55KI-M-Kan-CC-MTO-3,confirmedbymanyotherkeyinformantsinKandahar.56KI-M-Kan-PH-MTO-357KI-M-Kab-CU-STO-658KI-M-Kab-PW-MTO-2

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Oftenwhentheinitialassessmentismadeinthesesituations,arequestforpaymentisnotissuedbythetaxofficersonthesamedaybutlater,togivethebusinessownertheindicationthatabribeisexpectedandthatthedelayistheopportunityforthebusinessownertopaythebribe.59Highrateofilliteracyamongownersofsmallerbusinessessuchshops,restaurantsandweddinghallsresultsinaninabilitytoreadabouttheTaxLawandrelatedlegislationandagenerallackofinterestintheformallegalframeworkthroughwhichissuessuchastaxationaresupposedtobedocumentedandgoverned.Forexample,

Mostprivatesectorentitiesandmerchantsareilliterateandignorantofthelawandthereforeandhaveverylittleunderstandingorrecognitionoftheirresponsibilitiesunderthelaws.Theyalsodonotunderstandorcareforprocedures,paperwork,orpayingtaxesontimeoratall.Tomaketheirlivessimpler,theyoptforpayingbribestothetaxofficertogettheirclearancesandgettheirlicensesrenewed.Thewealthiermerchants,constructioncompanies,logisticscompanies,andNGOsareespeciallytargetedbycorrupttaxofficialsbecauseofthegeneralbeliefthattheseentitieshavelargefundsorfundingfrominternationalsources.60

Thereiswidespreadbeliefamongtaxpayersthatinadditiontogeneralignoranceaboutthelegalframeworkamongthetaxpayers,partiallyduetoilliteracy,taxofficialsthemselvesarenotfullyawareofthecontentsoftheTaxLawandtheirresponsibilitiestowardtaxpayers.Evenifthereisawarenessamongthetaxofficials,itisnottransparentlytransferredtotaxpayersbutused,instead,toentraptaxpayers.Toillustrate,asignificantnumberoftaxpayerscomplainthattheyarepenalizedretrospectivelyforunpaidtaxes,calculatedbasedonchangestotheTaxLawaboutwhichtaxpayersarenotsystematicallynotified.SomearguethatnotinformingtaxpayersofchangestotheTaxLawisintentionalbycorrupttaxofficialsanddonetoincreasetheamountowedintaxesandfinespayablebythetaxpayer,whoisthenofferedassistancetoreducetheamountowedinreturnforabribe.61Widespreadcorruptionisattributed,inpart,tothecurrentuncertainpoliticalandeconomicenvironmentinAfghanistan,underminingtheconfidenceofprivatesectorentitiesandinvestors.But,

Eveninthisdepressinganduncertainenvironment,witheveryoneincludingthegovernmenthavinggivenuphope,thingscanandneedtobedonetoridthiscountryofthecancerofcorruption.Driedfruitsandnutsproducershaveassociations,merchantshaveassociations,differenttypesofindustryhaveassociations,freshfruitproducershaveassociations,livestockownershaveassociations.Whydon’talltheseassociationsworktogethertofightcorruption?Itisbecauseeventheassociationsareafraidofthemafia-likenetworkofcorruptandpowerfulpeopleandwithouteveryone’shelpandcommitmenttheycan’tdoanything.62

Anumberoftaxpayers,particularlyfromtheprivatesector,havemadeofficialcomplaintstothemostofiatandtheprovincialgovernorsaboutthearduousprocessesoftaxassessmentandpaymentandcorruptionoftaxofficers.Insomecasesthesecomplaintshaveresultedinatemporaryrelaxingofthebureaucraticredtapeforthetaxpayersandlesseneddemandforbribes,onlytorevertbacktothepre-complaintconditionslater.6359KI-M-Nan-SC-MTO-3

eSharifand-4,confirmedbymanyotherkeyinformantsinKandahar,Kabul,Herat,Mazar-MTO-BW-Kan-F-KI60

Jalalabad.61KI-F-Nan-BW-MTO-1,confirmedbyallotherkeyinformantsinJalalabad.62KI-M-Kan-CU-MTO-163KI-M-Nan-NG-MTO-2,confirmedby4keyinformantsinJalalabadand7keyinformantsinMazar-eSharif.

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Thevastmajorityrefrainfromcomplainingaboutabusiveorextortivebehaviorbytaxofficersbecauseoftenthecomplaintsarerelatedtothetaxofficerinquestionwhomaychoosetoretaliateagainstthecomplainantthenexttimethecomplainantfilestaxes.64Manychoosetopaythebribe,eitherdirectlyorthroughakomishankarorfinancialconsultancyfirm,tosavethetimeandenergythatcouldbelostwithfilingcomplaints,fightingretaliationbyvengefultaxofficers,orresistingdemandsforbribes.65Opinionsandexperiencesondifferencesbetweenhowmaleandfemaletaxpayersaretreatedbytaxofficersarevaried,withsomestatingthattherearenodifferencesbetweenmaleandfemaletaxpayersintheeyesoftaxofficials,somestatingthatwomenaresubjectedtosexualharassmentinadditiontothegeneralintimidation,andsomestatingthatwomenhaveaneasiertimewithtaxofficialsbecausetheircasesareattendedtomuchquickerthanmen’s.Fiftysixpercentofthekeyinformantsthoughttherewerenodifferencesinthetreatmentmenandwomenbytaxofficialswhile44percentthoughtthatwomenaretreatedbetter.MTOinAction:TomorrowNeverComesIwenttoMTOwithourFinanceOfficerbecausethenewDirectorofMTOdealingwithourpapershadaskedourFinanceOfficertocomewithmeasthepresidentofourbusiness.ThenewDirectorofMTOhadsaidthatbythetimeofourmeetingoursubmissionpaperswouldhavebeenrelocated.WhenwegottoMTO,thenewofficialsinthesameofficeapologizedthatthenewMTODirectorwouldnotbeintheofficetill2pm.IapologizedthatIhadabusinessappointmentwithapotentialclientthatafternoonandsowouldnotbeabletocomeback.IexplainedthatthereasonIhadcometoMTOthatmorningwasthatthiskindoffruitlessjourneybackandforthtoMTOhadbeengoingonfornearly3yearsonthesamedocumentationandcostingusaround1,300USDintaxifaresalone.Irecountedthatthesenewpeople'sformercolleagueswouldrepeatedlysaythingslike,"Comebackthisafternoon","ComeonSaturday",or"Comebacktomorrow".Inthese3yearswhenwewouldgotoMTOatMTO’srequestandatthestipulatedtime,theMTOpersonwhohadcalledusinwouldbeinameeting,outoftheoffice,atafuneral,orhewouldsimplytellusthat"yourpapershavebeenpassedtoanotherdepartment","Yourpapershavebeenpassedto'InternalAudit'”,or,evenonseveraloccasionsweweretold,"Yourpapersaremissing,canyougoto[otherofficeswithinMTO]andfindthemforus".Ihavetonotethattheconversationwasallingoodhumorandverygood-natured.But,nevertheless,ImanagedtoexpressmyextremefrustrationwithoutshamingorembarrassingourFinanceOfficerwhohadmadeallthejourneystoMTO.

Source:KeyInformant,PrivateSector,Kabul,May2016StatementsaboutwomenbeingbettertreatedbytaxofficialswerestrongestinKandahar,dueto“generallyhowmenviewwomeninthisprovince,alwayswithrespectandahighdegreeofshyness.”66StatementsaboutwomenbeingharassedattaxofficeswerestrongestinKabulwheresomeofficersmakesuggestiveremarksandaskfornamesandphonenumbersoffemaletaxpayers.67Only29percentofthoseinterviewedwereawarethatAfghanistanhadlegalprovisionsagainstcorruptionandlessthanhalfofthoseinterviewedhadcopiesoftheTaxLawonpremises(Figure4).Figure4.TaxpayerLegalKnowledge(%)

64KI-M-Maz-CC-MTO-2,confirmedbythevastmajorityofotherkeyinformantsinMazar-eSharif.65KI-M-Nan-TC-LTO-7,confirmedbymanyotherkeyinformantsinJalalabad.66KI-F-Kan-BW-MTO-4,confirmedbythevastmajorityoftheintervieweesinKandahar67KI-F-Kab-NG-MTO-4

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n=187Whenaskedwhatcanandneedstobedonetocurbcorruption,strongsentimentwasexpressedformorecooperationamongtaxpayingentitiesonjointactionstoadvocateforchangeinthetaxofficesandcreateprocessesandmechanismsthatwouldprotecttaxpayersagainstextortionorpersecutionbyretaliatingcorruptofficials.68However,thevastmajorityofthosesurveyedbelievedthattherewerenomechanismstoprotecttaxpayersthatmightchoosetoofficiallycomplainagainstextortionbytaxofficers.Anotherpre-conditionforresistingcorruptionistheadherenceoftaxpayerstotherulesofdeclaringtaxesandlawsgoverningtaxpayments:

Ifallprofitandnon-profitentitieskeepgoodrecordsanddotheirreportingcorrectlyandontime,theyleavefeweropportunitiesforcorrupttaxofficerstocausedelaysanddemandbribes.So,wecannotjustblamethecorrupttaxofficials.Someoftheresponsibilityandblamelieswithtaxpayersalso.69

Akeyareawheretaxpayersneedprotectionandassistanceisinthewayinwhichpurposefuldelaysbytaxofficersinprocessingpaperworkisusedtoamasslargepenaltiesforlatepaymentsoftaxes,creatingtheconditionsforextortion:

IftheMTOtaxofficersdon’tknowyou,theyroutinelydelayprocessingyourpapers.Theykeeptellingyoutocomebacktomorroworinafewdays,orthenextweek.Oncetheygettoknowyouafterafewdays,theyaskyoudirectly:‘howmuchareyoupreparedtopaysoweprocessyourpapers?’Ifyouresist,theysaythattheywouldhavetoorganizeanonsiteassessmentofouroperationsbutthatitmighttakeuptotwomonthstoorganize.Allthewhilewearebeingchargedadailyfeeforbeinglateinpayingourtaxes.Intheend,weowesomuchthatweseeittoouradvantagetojustpayabribeandendtheprocess.70

68KI-M-Kab-NG-MTO-7.SimilarsentimentswereexpressedinMazar-eSharif,Herat,Kandahar,andJalalabad.69KI-F-Kab-NG-MTO-570KI-M-Kab-PW-MTO-1.SimilarstatementsweremadebykeyinformantsMazar-eSharif,Herat,Kandahar,andJalalabad.

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Despitetheapparentabusesbythetaxoffices,theoverwhelmingmajorityoftaxpayerslearnaboutnewtaxrequirementsfromthethreetaxoffices,infamousforoftenmisquotingandmisinterpretingtheTaxLaw,itsprovisions,andvariousamendments.Around14percentrelyonathirdpartysuchaskomishankarsortaxconsultantswhileonepercentreceivetheirupdatesontheTaxLawfromAISA(Figure5).Figure5.MainSourceofInformationonTaxRules(%)

n=187Therearecallsbysometaxpayersforincreasingbasicliteracyandlegalliteracyamongtaxpayingentities,legalliteracyandprofessionalismamongtaxofficers,andoversightmechanisms–includingliverecordingoftaxpayer/taxcollectorinteractionsinSTO,MTO,andLTO–toincreasedeterrencetocorruptbehaviorbybothtaxpayersandtaxofficers,increasetransparencyandaccountability,andcollectevidencetoprosecuteoffenders.Aspartoftheattemptstominimizepossibilitiesforcorruptbehavior,manyalsosuggesteddigitizationofprocessestoeliminate“thehumanfactor”frommonetarytransactions.71

DriversofCorruption

ThefindingsfromtheanalysisoftheinterviewswithkeyinformantsinKabul,Mazar-eSharif,Herat,Kanadahar,andJalalabadrevealsthefollowingdriversofcorruptionintaxpaymentandtaxcollectionatSTO,MTO,andLTO:InefficientBureaucracy:Theprevalentinefficiencyofgovernmentadministrativebureaucracyoftenactsastheincentivefortaxpayerstoseekshortcutsthroughpayingbribestothewillingofficials.Toillustrate,thecomplicatedandever-changingfinancialdeclarationformforreportingrevenueandcalculatingthetaxpayableis15pageslongandcarriesapenaltyof20,000Afghanis(approximately$400USD)ifwronglycompleted.Completingthisformistimeconsumingandriskyforthetaxpayerand

71KI-M-Nan-TC-LTO-7.SimilarstatementsaboutdigitizationoftaxassessmentandtaxpaymentweremadebyotherkeyinformantsfromKabul,Herat,Mazar-eSharif,andKandahar.

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RevenueDepartment ThirdParty AISA Others

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createsopportunitiesforthecorruptofficialtoofferassistanceandfasttrackingservicesinreturnforbribes.GeneralandLegalIlliteracy:Lowrateofliteracyamongmany,mostlyprivatesector,taxpayersandthuslittleornointerestinreadingthelittleinformationthatexistsontaxpaymentproceduresisamajorincentivepayingbribestobypassarduousprocedures.ThosewhoareliteratedonotknowtheirrightsunderthelawortheprovisionsandproceduresintheTaxLaw.Lackoflegalawarenessamongtaxpayersisoftenusedbycorrupttaxofficialstocomplicateproceduresandentraptaxpayersintopayingbribes.Irresponsible/OpportunisticBehaviorofTaxpayers:LackofasenseofcommitmenttoabidebytheruleoflawandpayingtaxesamongprivatesectorentitiesandNGOsresultsinlookingforshortcutsinproceduresandminimizingtheamountoftaxpayable,bothfertilegroundsforbribeseekingofficials.InstitutionalizedBribeSeeking:Corruptofficialssystematicallyfindfaultswithtaxpaymentforms,howeverperfectlycompleted,claimingthattheformsarewronglycompleted,additionalformsneedtobefilledout,orthatextradocumentationisneeded.Delaysinthesubmissionoftaxformsoftenresultinmissingdeadlinesfortaxdeclarationandthepaymentoffinesforlatenessinsubmission.Facedwiththis,thetaxpayerisgiventhechoiceofpayingabribetohavetheproblemtakencareofbyacorruptofficialorcompletethepaperwork–whichoftentakesmonths–andincurthepaymentoftheaccumulateddailyfineforbeinglate.PrevalenceofRentSeekingIntermediaries:Therearecountlessunregulatedkomishankarsand“financialconsultancyfirms”thatroutinelypaybribestogetthingsdonefortheirclientsatthetaxoffices,sustainingawellfunctioningcorruptsystemintaxpaymentandtaxcollection.ImpunityofCorruptOfficials:Therearenoreportsofcorruptofficialsatthetaxofficeshavingbeenchargedorbroughttojusticesforbribetaking.Taxpayersgenerallyshyawayfromreportingcorruptofficialsbecausetheyfearretaliation.InstitutionalDeficiency:Therehasbeeninsufficientvisibleactionbygovernmentauthoritiesagainstcorruption,particularlyintaxpaymentsandreceipts.Thereisnoindependent,no-partisan,andnon-profitsourceofinformationandguidanceontheTaxLawandrelatedlegislation.Also,thereisnofunctioning,independentcomplaintmechanismthatactsoncomplaints,recommendsoffendersforprosecution,andprotectsthecomplainants.Theburdenofproofofcorruptionintaxofficesremainswiththetaxpayerswhodonotreportcorruptionduetofearofretaliationbycorrupttaxofficers.ManualStepsinTaxCalculationandPaymentProcesses:Thepresenceofthehumanelementinalldealingswiththetaxofficescreatesopportunitiesforbribery.Thelimitedcomputerizationoftheprocesshasnotyetremediedtaxprocessingdelaysbecause,accordingtothetaxpayers,thesystemisoftendownandtherearealwayslongdelaysinenteringthedataintothesystem.Inadditiontodelays,corruptofficialscanforcebribesbyintentionallyenteringthewrongdataontaxpayers’digitalforms.AggressivenessandUnprofessionalisminServiceProvision:Taxpayersviewtaxofficialsasunqualified,impolite,andaggressivetowardtaxpayers.Thereiswidespreadbeliefthatcorrupttaxofficersworkincollusionaspartofanorganizednetwork.Therearealsowidespreadrumorsthatpositionsdealingwithtaxpayersarenotrecruitedforbasedonmeritbutboughtandsold,witheachpositionhavingapricetagbasedonitspotentialtocollectbribes.Thereisalsoageneralfearofretaliationbycorrupttaxofficialsifataxpayerresistsorcomplainsaboutpayingabribe.

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IntentionalBureaucraticConfusionandArbitrariness:Theorganizationalstructureofthetaxofficesisnotclearlydelineatedandthereisagenerallackofproceduralinformation.ChangesintheTaxLawarenotsufficientlydisseminated,leavingeveryoneatthemercyofself-servinginterpretationsbycorrupttaxofficials.Arbitrarily,thetaxpayablebyaprivatehealthclinic,forexample,iscalculatedbythebribeseekingtaxofficeronthebasisofthemonthwiththehighestrevenueandextrapolatedtothewholeyear,forcingthetaxpayerintonegotiationswiththetaxofficerabouthowtolessentheamountoftaxpayable.LackofOversight:Lackofongoing,transparentmonitoringmechanisms,includingtherecordingofinteractionsbetweentaxofficersandthepublic,protectscorrupttaxpayersandtaxofficials.Also,thelackofoversightandindependentvalidationofincomeandtaxliabilitymeanthatcorruptofficialshavemuchlatitudeoverestablishingtheamountoftaxesandpenaltiesowed.

ConclusionandWaysForward

Goodgovernanceentails,amongotherelements,theobligationbypublicofficialstokeepcitizensinformedaboutpublicservicesandtoexplainpublicdecisionstocitizens.Goodgovernancerequiresacitizenrycapableandempoweredtoengagewithpublicofficialsinpublicdecisionprocesses.Openandfreeengagementbetweencivilsocietyandstateauthoritiesasapreconditionofgoodgovernancerequiresfreedomofexpressionforamultiplicityofactorsincludingthemediaandnon-governmentorganizationstopurveyinformationontopicsmostimportanttosocietytothepublic,initiatediscourse,andactaswatchdogs.Experiencewithcorruptionfromothercountriessuggeststhatinadditiontothecommitmentbythetoppoliticalleadershiptofightcorruption,severalreformsneedtobeimplementedsimultaneously.Theseare,strengtheningofenforcementagencies,increasingcivilservants’paytomakeitmorecomparabletoprivatesectorpay,routinerotationofpublicofficialstomakeitharderforcorruptofficialstodevelopstrongtiestocertainclients,rewardingthosewhorefusebribesandturnintheoffendingclient,simplifyingrulesandproceduresandpublicizingthem,scrappinganumberofunnecessarypermitsandapprovals,loweringoreliminatingfeesincludingforimportduties,andprovidingeasypublicaccesstoinformationontheworkingsofpublicprograms.ThekeyconclusionsfromthereviewoftheliteratureoncorruptioninreconstructionanddevelopmentandtheanalysisofthedatacollectedinKabul,Mazar-eSharif,Herat,Kandahar,andJalalabadmaybesummarizedasfollows:• Corruptionunderminesdevelopmenteffortsandgovernmentlegitimacyandeffectivenessand

resultsinincreaseddistrustandindignationamongordinarycitizenssincecorruptionoftencombineswithotherriskfactorssuchasethnic,religious,andlinguisticriftsandtensions.

• Widespreadandsystemiccorruptionneedstobeunderstoodthroughtherulesetssurroundingastate’selitecomposition,eliteaccountability,degreeofcitizens’participationingovernance,andmethodsofmanagingthestate’smaterialresources.Nationswithhighlevelsofinstitutionalizedcorruptionfunctiononthebasisofoneormultiplekleptocraticnetworksthatmaintaintheircontrolingovernmentandcaptureofkeyfunctionsthroughforce,orthreatsofusingforce,bothformallyandinformallyagainstthosethatresistorchallengethem.

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• Structured,orinstituted,kleptocracyfunctionsbasedonaverticalintegrationofnetworks,characterizedbyanelitethattakesinthelionshareofextortedorstolenfunds,andtheadditionalleviesfrombribescollectedbypettycriminalsinextortivegovernmentpositionsingovernmentstructuresthathandlemoneydirectlyastaxandotherlevycollectionmechanismsorofferessentialservicessuchasbusinessorothertypesoflicenses.

• Cultureswithcollectivisttendenciesspawnsegregatedsocieties.Socialandeconomictransactionsincollectivistculturesareorganizedaroundsmallgroupsdefinedbyfamilial,kinship,tribal,ethnic,religious,orothersocialrelationships.Eachgrouptendstohaveitsownnarrowbaseofinterest.Paternalism,theideathatthegroupleaderdecideswhatisbestforthefamilyorgroup,isamainorganizingfactor.

• Institutionalizedcorruptionismuchmorethanasymptomofadministrativeincompetenceorabuse,andfixablebyprovisionofresourcesandtransferofadministrativeskills.

• Asaninstitutionthroughwhich[bad]governanceisexercised,corruptioncreatesstabilityforarulingelitebuiltonshakyfoundationsandlackinglegitimacyandonewhosetoppoliticalleadershipiswillingtoimplementanimplicitpolicyofofferingmonetaryandothermaterialrewardstokeepthepeacewithcontendingkleptocraticnetworksthatpresentathreattotherulingelite.

• Corruptioninanysocietycanbeplacedalonganormativecontinuumofwhite,gray,andblack.Whitecorruptionreferstocorruptioninitsmostwidespread,systematic,andcondonedforminthatthemajorityoftheeliteandthecitizenswouldnotsupportorexpectattemptstopunishcorruptbehavior.Graycorruptionreferstosituationswheresomeelements,amongeithertheeliteorcertaingroupsofcitizens,maywanttoseecorruptbehaviorpunishedwhileothersmaynot.Blackcorruptionreferstosituationswherethemajorityconsensusofboththeeliteandcitizenscondemnscorruptbehaviorandwantsitpunished.Amajorfirststepincombatingcorruptioninacountryistoestablishwhatconstituteswhite,gray,andblackcorruption.

Arguably,mostoftheabovepointsselectedfromthereviewoftheliteratureoncorruptionapply,invaryingdegrees,toAfghanistanandcouldbeusedasastartingpointinthedialoguebetweenstateauthoritiesandcivilsocietyonhowtofightcorruption.Basedontheabovesummaryfromtheliteratureandthefindingsfromtheanalysisoftheempiricaldata,wemayconcludethefollowing:• Willingnesstopaybribesbytaxpayersiscomparableintermsofbeinginstitutedtothepredictable

demandbycorruptofficialsforbribestospeedthroughataxfileortoreducetheamountoftaxpayable.

• Manytaxpayingentitieswithoutpower,connection,orpatiencegiveinandthuscontributetothecorruptsystembypayingabribeorenlistingtheservicesofkomishankars(fixers)fordealingswithtaxofficials,paymentoftheirtaxes,andobtainingtaxclearances.

• ThetaxpayingentitiesresistingdemandsforbribesoraskingforlegitimateservicefromtaxofficialsriskintimidationbycorrupttaxofficersandthethreatofbeingpenalizedthenexttimeorbeingreportedtotherelevantInvestigationUnitofoneofthethreetaxoffices.

• Methodsofaskingforbribeshavebecomesimultaneouslymoreblatantandmoresophisticated.• Completionoftaxformsisanarduousandunclearprocess,withfrequentchangestothe

procedureswithoutnotifyingthetaxpayers.Tocompletetheirformsmosttaxpayersneedguidance,eitherintheformofserviceadvicefromtaxofficialsorfromtaxprofessionals.Theadvicefromthetaxofficesandprofessionalscomesatacost,however,andtypicallycontainsabribeelement,payableeitherbythetaxpayertothecorrupttaxofficialdirectly,orindirectlybythetaxprofessional

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actingasthefixerforthetaxpayer.Thekeyoperatingtermintaxclearanceisjooramadan,orcomingtoanarrangement,ratherthanproper,documentedassessment,payment,collection,andissuanceofclearance.

• Thereisawidespreadviewamongtaxpayersthatmostvictimsofextortionintaxpaymentwanttocomplainandclaimtheirlegalrightsbutthattheyarediscouragedbycasesofpeoplewhohavecontestedcorruptioninthetaxassessmentandpaymentprocessesandhavesubsequentlybeensubjectedtoretaliatoryactionbythecorrupttaxofficialsthatwerethesubjectoftheircomplaints.

• Thereisstrongevidencethatmostvictimsofextortionwouldbewillingtoreportextortionbutontheconditionthattheyareprotectedfromsubsequentpersecutionbycorrupttaxofficials.

• Betterusecouldbemadeofpre-existingstructuressuchastradeassociationstocurbcorruption.Associationsexistforalltrades,representingmembersindisputeswiththegovernment,particularlyontheissueoftaxesandreformstotheTaxLaw.Inmanycases,however,assistancefromassociationstotheirmembersontaxrelatedissuestakestheformoffixingproblems,ofteninvolvingjooramadan,ratherthanchampioningordefendingtheirmembers’legalrights.

• AwarenessoflegalprovisionsagainstcorruptionremainslowandmanytaxpayingentitiesdonotevenhavecopiesoftheTaxLawontheirpremises.Manytaxpayingentitiesalsolackproperdocumentationsystems,includingfinancialrecordkeeping,andareunableorunwillingtoprovidefulldocumentedtransactionrecordstotaxassessors.Nothavingafulldocumentationsystemmakestaxpayersvulnerabletoextortionbycorrupttaxofficials.

• Liverecordingoftaxpayer/taxcollectorinteractionsinSTO,MTO,andLTOmaybearelativelyeasytechnicalfixtodetercorruptbehaviorbybothtaxpayersandtaxofficers,increasetransparencyandaccountability,andcollectevidencetoprosecuteoffenders.Anotherdeterrentmaybethefullerdigitizationoftaxassessment,payment,andcollectionprocessestoeliminate“thehumanfactor”frommonetarytransactionsinpaymentandcollectionoftaxes.

Fightingcorruptioninothercontextsclearlyshowsthatcorruptioncannotandmustnotbeviewedasmerelyatechnicalproblemthatcanbefixedbycapacitybuilding,equipmentsupport,orlegislation.Fightingcorruptionhastobeamulti-prong,multi-actorintervention,adequatelyresourced,andlongtermoriented.Assuch,fightingcorruptionnecessitatesaseachange,drivenbytechnicalintervention,ongoingdialogue,re-educationaimedatculturalchange,civilsocietypushandparticipation,committedandresponsivestateauthoritiesand,inthecaseofAfghanistan,committedinternationaldonorsinactionaswellaswords.

Recommendations

Basedontheliteratureoncorruptionandtheanalysisoftheempiricaldatacollectedforthisresearch,thefollowingactionsshouldbeconsideredforfightingcorruptioninthetaxsysteminAfghanistan:UnderstandCorruption,ItsDrivers,andManifestations:Thereisdearthofknowledgeonpreciselywhereandhowcorruptionoperatesandsustainsitself.Thereisalsoapoorunderstandingofexactlyhowcorruptionunderminestheeconomyandthuspoliticalstability.Appendix1outlinesanumberofareasrequiringin-depth,ongoingresearch.Effortsshouldbemadebythegovernmentanditsinternationaldonorstocommissionresearchintotheseandotherareastofeedintoamuchneededknowledgebaseoncorruptionandwaystocurbit.MainstreamAnti-corruption:Organizemulti-stakeholderpubliceventsontheseriousnessofcorruptioninAfghanistanandhowcorruptionsunderminesnationalsecurity.AppealtoIslamicprinciplestoargue

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againstcorruption.Alertmediatotheproblemofcorruptionintaxpaymentandtaxcollectionandlinktheproblemtothegeneralconcernaboutinsecurityandlawlessness.Raisegeneralawarenessabouteverydaycorruptionbywhatevermeansnecessary,frombillboardmessagingtograffitiinpublicplacesandanti-corruptionteachinginearlyandmiddleeducation.SetupIndependentComplaintMechanism:Setupanon-government,non-profit,independentandresponsivecomplaintmechanismforreportingcorruptionanonymously,staffedbyprofessionalsdrawnfromtheaccountingprofessionandcivilsocietyonarotatingbasis.Regularmonthlyorquarterlyreportsofthesecomplaintscouldbeusedtoinformgovernmentactiononanti-corruption.EstablishaClassofProfessional,IndependentTaxConsultants:Sincetaxpayershavelittletimetogothroughthecomplicatedprocessofcompletingforms,evenindigitizedform,andpreparingsupportdocumentation,thereissubstantialdemandforprofessionaltaxconsultantsandkomishankarswhocoulddothisonbehalfofthetaxpayer.Giventhedamagingroleplayedbykomishankarsandunregulatedconsultantsinsustainingcorruptioninthetaxoffices,effortsshouldbemadetoeliminatekomishankarsandunregulatedconsultantsandreplacethemwithqualified,independent,andlicensedtaxconsultants.Thiswouldbeparticularlyeffectiveifcoupledwithdigitalizedtaxformstobecompletedonlinebythetaxpayers.EstablishProfessionalAccreditationandProcessesforTaxOfficePersonnel:Endnepotisticappointmentsatthethreetaxofficesandappointnewofficersbasedonqualificationandmerit.Appointmentsshouldbemadewithoversightfromindependent,civilsociety-basedbodies.Enforcestrictseparationofdutiesbetweentaxassessment,proceduraladvice,andtaxcollectionfunctions.ScrutinizeAssets-IncomeRatioofPublicOfficials:Establishasystemofannualtotalassetdeclarationforalltaxofficepersonnelastheconditionofcontinuingemployment.Takeaction,startingwithincomesourceverification,onthoseofficerswhohaveamassedassetandmoneyaboveandbeyondtheiraccumulatedsalaries.SetUpAnti-corruptionViceSquad:Thevicesquadcouldbeusedformonitoringoftaxpayersandtaxofficerstoidentifybribegiversandbribetakersandtobringchargestoprosecutethem.Thepersonnelforthevicesquadmustberotatedonaregularbasistopreventcapture.SetUpRewardSystemforAnti-corruption:Taxpayersandtaxofficerswhoplayrolesinpreventingbriberyshouldberecognizedfortheirserviceandrewardedaccordingly.SimplifyandStandardizeTaxForms:Therelittleornoneedforamultiple-pagedocumentstobefilledoutbythetaxpayer.Thereisalsonojustificationforpenaltiesforincorrectlycompletingaform.Theformshouldbeshortenedandthepenaltyremoved.Inaddition,accurateproceduresandstepsforfilingtaxesatall3taxofficesmustbeestablished,usingthewrittenwordandsymbolstoensuretheilliteratecanalsofollowtheproceduresandsteps.ProvideFullAccesstoTaxLawandAmendments:AllrequestsforinformationanddocumentationbytaxofficialsmustbetiedtothelegalprovisionswithintheTaxLawanditsvariousamendments.Incasesofdisagreementtheonusmustbeonthetaxofficialtoprovidelegalsupportfortherequestsfordocumentsandinformation.

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IncreaseTaxLawLiteracy:ConsiderationneedstobegiventoMinistryofFinance-supportedinitiativesonTaxLawliteracywithafocusonthelegalrequirementsandtherightsandobligationsofthetaxpayers.Suchinitiativeswouldworkbestifcarriedoutinclosecollaborationwithtaxpayers’groupsandbusinessassociations.AddressNeedsofSmallBusinesses:Particularattentionshouldbepaidtohowtotaxmicroandsmallbusinesseswhichtypicallylackrecordsoftheirtransactions,havelittleornoliteracyorbusinessmanagementsystems,andthusareatthemercyofpredatingtaxofficialswhocouldrequestarbitraryamountsastaxespayable.Smallandmicrobusinessesfallingintothiscategoryincludeshopkeepers,mechanics,orsmallrestaurants.MakeEfficientandEffectiveUseofDigitization:Thereisnoreasonfornotallowingtaxpayerstocompletetheirtaxformsonlineandreceiveconfirmationastoitsstateofcompletion.Removingthehumanfactorinthisprocessislikelytoreduceopportunitiesformeddlingbycorrupttaxofficials.StrengthenTradeAssociations:Manysmallbusinessespaytheirtaxesthroughtheirtradeassociationsthatarealsosometimesvictimsofextortionbytaxofficials.Measuresshouldbetakentoprofessionalizetheguild-typeassociationsbytrainingthemonhowtoutilizelawstocombatcorruptionandprotecttheirmembers.Additionally,equiptheassociationswithevidencethatcouldbeusedintheirengagementwithtaxandothergovernmentauthorities,includingdifferentformsofadvocacyandpublicawarenesscampaignsthroughthemedia.MonitorandActonTaxpayer-TaxCollectorInteractions:Asadeterrenttobriberyinitiatedbyboththetaxpayersandcorrupttaxofficials,considerinstallingcamerasthatrecordallinteractionsinSTO,MTO,andLTOandkeeptherecordsforatleastonemonth.AdoptInternationalAnti-corruptionStandardsforGovernmentTransactions:WiththefullestablishmentoftheNationalProcurementAuthorityinAfghanistanwithamandatetoinstituteacosteffectiveandtransparentprocurementsystemtocontrolpublicexpenditureanddecreasecorruption,thereisauniqueopportunityfortheGovernmentofAfghanistantoleadbyexampleandadoptISO37001,guidanceforestablishing,implementing,maintaining,reviewingandimprovingananti-briberymanagementsystem.72

72FormoreinformationonNationalProcurementAuthority,see:http://www.npa.gov.af/en/introduction.FormoreinformationonISO37001Standards,see:https://www.iso.org/standard/65034.html

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Appendix1:AreasofResearchonAnti-corruption

1. Dynamicsofdevelopmentaidcontracting:Amappingexerciseonhowinternationalfundsaredecidedon,throughwhichintermediariestheyaredisseminated,andthroughwhatmechanismsoversightisorcanbeprovided.Themappedprocessshouldthenbeassessedforrobustness,integrity,andbuilt-inmechanismstogeneratemonitoringandimpactdata.Basedonthismappingexercise,thefollowingquestionsmaybeasked:• Arethereadequate(relevant,efficient,effective)andreliablesystemsofchecksandbalancestomonitorhowandwhetheraidfundsreachtheirtargets?

• Isthemannerinwhichaidfundsareallocatedcontributingorunderminingthecapacityofthenationalorganizations?Forexample,isthehighnumberofinternationalexpertsanddevelopmentbusinessesdeliveringdevelopmentprogramsalwayseconomicallyandpoliticallyjustified?

• Howdoestherelianceoninternationalexpertsanddevelopmentbusinessestoaddresscorruptionaffectnationalcapacitydevelopmentintherecipientcountry?Whataretheimplicationsofusing,ornotusing,nationalstaffonfightingcorruptionorcorruptivemodesofoperation?Whataretheactualcapacityandstructuralneedstofacilitatemorerelianceonqualifiednationalstaff?

2. Relationshipbetweenconflicttraumaandcorruption:ManyAfghanswouldrathernotexercise

theirlegalrighttoprotestagainstextortionorofficialcorruption.Thefollowingquestionsmaybeaskedtoestablishtherelationshipbetweenpersistentcorruptionandconflicttrauma:• WhatmeasurescanbetakentobuildtheconfidenceofordinaryAfghansintakingoncorruptionorcorruptbehavior?

• Whattypesofprovisionsareneededtoprotectthosewhodaretoprotestagainstcorruption?

3. Realigningtrainingandmentoringoncorruption:MethodstofightcorruptionareincreasinglybeingconsideredincapacitydevelopmentprograminAfghanistanandotherconflictandpost-conflictcountries.Someoftheissuestoconsiderintheseeffortsare:• Whatsetsofvaluesandtraditionalstructurescouldbeutilizedtofightcorruption?• Howcancapacitybuilding/developmentonanti-corruptionbealignedtoresonatemoreexplicitlywithtraditionalmoralandreligiousvaluesagainstextortionandotherformsofcorruption?

4. Roleoftraditionalnorms,values,andstructuresinanti-corruption:Weeklyreligiousgatheringsare

effectivedeliverymechanismstorelaymessagesonbehavioralandsocialchange.Assuchtheirrolecouldbeassessedtoservefightingcorruptionatdifferentlevels.Questionstoconsiderinclude:• Doesorshouldthemosqueputanti-corruptiononitssocial/educationalagenda?• Whatrolecouldcivilsocietyorganizationsandthegovernmentplayinworkingmorecloselywithreligiousinstitutionsandauthoritiestofightcorruption?

• Arethereanyexamplesofsuchcooperationandaretherepossibilitiesforscalingoutandscalingupthelessonslearned?

5. Genderandcorruption:Corruptionhasanadverseimpactongenderrelationsandtendstoaffectwomenfarmorethanmen.Questionstoinvestigateunderthisthemeinclude:

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• Whatarethedifferencesbetweentheexperiencesofmenandwomenfacedwithcorruption?• Howdoescorruptionaffectwomen’saccesstobasicservicessuchashealth,education,andformaljustice?

• WhatisknownabouttherelationshipbetweencorruptionandgenderrelationsincontextsotherthanAfghanistan?Whatarethelessonslearned?

• Whataretheavailablepolicyoptionsforthegovernmentanddonorsforincludinganti-corruptionintheirgenderprogramming?

6. Politicalpartiesandcorruption:TherehasemergedaplethoraofpoliticalpartiesinAfghanistan

since2001.Increasinglythesepoliticalpartiesareincludingsocietalissuesontheirpoliticalcampaignsandannouncements.Questionstoconsiderinclude:• Towhatextentdopoliticalpartiesviewcorruptionasacampaigningissue?• Whatneedstobedonetoplaceanti-corruptionasahighprioritycampaigningpointontheagendasofpoliticalpartiesandelectionsatsub-nationalgovernmentlevels,particularlyatprovincialcouncilandcommunitydevelopmentcouncillevels?

7. Non-partisancivilsocietyorganizationsandcorruption:Therearesomecivilsocietyorganizations,

suchasIntegrityWatchAfghanistanandquasi-governmentorganizationssuchastheHighOfficeofOversightandAnti-corruptionwithspecificandexplicitmandatestofightcorruptionthroughadvocacyandinformationsharing.Questionstoconsiderinclude:• Whatcanbedonemoregenerallybycivilsocietyorganizationsasactorsingoodgovernancetofightcorruptionbyincludinganti-corruptionasakeypartoftheirmandates?

• Whatisknownaboutcivilsocietyorganizationsandtheirinitiativesinfightingcorruptioninothercountries?

• Whatisknownaboutsuccessfulinitiativesbygovernmentalentitiestofightcorruptioninothercontextsandcountries?

• WhatcanbelearnedfromactionsandinitiativesbyprivateandpublicentitiesinothercountriesforfightingcorruptioninAfghanistan?

8. Governmentandcorruption:Despitebeingthemainfocusofthediscourseoncorruption,thereis

insufficientinformationontheincentivesystemthatsustainscorruptioningovernmentalentities.Issuesthatwarrantin-depthinvestigationinclude:• HowdoescorruptioninthecivilserviceaffectpoliticsinhighofficesofgovernmentincludingtheParliament?

• Arethereelementswithinthepoliticalsystem,andparticularlyintheParliament,thatcouldmoreopenlyandindependentlyworkwithcivilsocietyorganizationsinfightingcorruption?

• Arethereexamplesofhowelectedparliamentariansandcivilsocietyorganizationsworkingtogethertofightcorruptioningovernmentalentities?

• Whattypesofincentiveareneededtostrengthencollaborationbetweencivilsocietyorganizationsfightingcorruptionandelectedparliamentarians?

9. PrivateSectorandcorruption:TheprivatesectorinAfghanistanmakesthemostsignificant

monetarycontributiontoperpetuatecorruption,notbecauseitwantstobutbecauseitisleftwithnochoiceorincentivetoresistpayingbribes.Thekeyquestionstoinvestigatethroughin-depthresearchinclude:• Whataretheviewswithintheprivatesectoroncorruption?

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• Howcanbusinessesbeencouragedtoexercisetheirlegitimaterightstoservices,includingbeingprotectedagainstcorruptofficials?

• Towhatextentiscorruptionaproductofanon-existentorimproperlyfunctioningtaxationsystem?

• Whatsetofincentivesareneededtocreateimpetusfortheprivatesectoractorstofightcorruption?

• Howdothemoretraditionalbusinessestacklecorruption,ifatall?10. Factormarketsandcorruption:Alldonorshaveorganizationalprovisions,orchecksandbalances,

toensureadequateappropriationoftheirfunds.Thebulkofmisappropriationofdonorfundsandotherresourcestakesplaceoutsidetheimmediateorganizationalboundariesofthedonors.Questionsthatmaybeaskedthroughin-depthresearchinclude:• Whatisknownabouthowdonoraidfundsarespentorusedoncetheyleavethedonors’organizationalboundaries?

• Whatistheknowledgelevelsofthedonorsaboutthefactormarkets(labor,land,material)?• Arefactorpricesbeingmonitoredbydonorsorotherentitiestoensurepricesbeingpaidbydonorsandtheircontractorsarenotextortionateand/ordistortiveofthedomesticlabormarket?

• Howcandonorsknowtheyarenotbeingovercharged?Independentresearchisrequiredsimultaneouslyinalloftheaboveareas.Thefindingsfromin-depthresearchintheaboveareasarelikelytocontributetoaparadigmchangeinhowinternationaldonorsandtheirgovernmentsviewandfightcorruptioninAfghanistanandelsewhere.Thefindingsfromresearchintheaboveareascanbeusedforadvocacyinitiativestoengagegovernmentandotherentitieschargedwithfightingcorruption.TheseentitiesincludeAfghanistan’sHighOfficeofOversightandAnti-corruption,civilsocietyorganizationswithafocusonanti-corruptionsuchasIntegrityWatchAfghanistanandtheIndependentJointAnti-CorruptionMonitoringandEvaluationCommittee(MEC),andnationalnetworkorganizationswithmandatesongoodgovernancesuchastheNationalAdvocacyCommittee(NAC).73

73NACwasestablishedbyAPPROinMarch2015withamandatetofacilitateproductiveinterfacebetweenAfghancivilsocietyandgovernmentalofficialstowardgoodgovernance.

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Appendix2:InterviewGuidingQuestions

OrdinaryCitizens:1. Tellusabouttheformsofcorruptionassociatedwithtaxcollection/paymentsysteminvolving

therevenuedepartmentoftheMinistryofFinancea. b. c. d.

2. Whatspecificexperienceshaveyouhadregardingcorruptionassociatedwiththerevenue

departmentoftheMinistryofFinance?List.a. b. c. d.

3. Whatexpressionsareusedbyrevenuedepartmentofficialswhentheyexpectabribe?List.

a. b. c. d.

4. Whatdoyouthinkarethereasonsforcorruptionintherevenuedepartment?List.

a. b. c. d.

5. Haveyou,oranyoneyouknow,everreportedacorruptioncase?Tick.

Yes No6. Ifyes,towhomandhow?Describe.7. Howdopeoplerespondtoacorruptofficialwhoofferstofixaproblemforabribe?Listand

describe.a. b. c. d.

8. Whydopeopleagreetopaybribe?

9. Howcanpeoplebeencouragednottopaybribes?

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10. WhatistheimpactofbriberyandcorruptiononservicedeliverybytherevenuedepartmentoftheMinistryofFinance?List.

a. b. c. d.

11. Doyouthinkprovidingtrainingsonhowtopreventanddetectcorruptionwouldbeusefulfor

thegeneralpublic?Explain.

12. DoyouthinkprovidingtrainingsonhowtopreventanddetectcorruptionwouldbeusefulfortheofficialsoftherevenuedepartmentoftheMinistryofFinance?Explain.

13. Dowomenexperiencecorruptiondifferentlythanmen?How?Explain.

14. Iscorruptionthesame,ordifferent,amongmaleandfemaleemployeesoftherevenuedepartmentoftheMinistryofFinance?

15. Whatareyoursuggestionstocurb/reducecorruption?a. b. c. d.

16. IsthereanythingelsethatIhavenotaskedyouandyouwouldliketoshare?

GovernmentOfficials:

1. Howseriousiscorruptioningovernmentdepartmentsingeneral,andtherevenuedepartmentoftheMinistryofFinanceinparticular?

2. Whatarethereasonsforcorruptionintherevenuedepartment?

a. b. c. d.

3. Howmanytypesofcorruptiondoyouknowabout,inrelationtotherevenuedepartment?

a. b. c. d.

4. Haveyoueverbeenthreatenedtoloseyourjobifyoureportacorruptioncase?Ifyes,how?

Explain.

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5. Doyouknowsomeonewhohaslosthis/herjobbecauseofreportingacorruptofficialintherevenuedepartmentoftheMinistryofFinance?Ifyes,describe.

6. Whichisthemostimportantactorinfightingcorruption?

a. Governmentb. GeneralPublicc. Internationaldonorsd. Privatesectorbusinessese. Civilsocietyorganizations

7. Doyouthinkmenexperiencecorruptiondifferentlythanwomen?How?Explain.

8. Doyouthinkprovidingtrainingsonhowtopreventanddetectcorruptionwouldbeusefulforgovernmentofficials,particularlyemployeesoftherevenuedepartment?How?Explain.

9. Whatareyoursuggestionstoreducecorruption?a. b. c. d.

10. IsthereanythingelsethatIhavenotaskedyouandyouwouldliketoshare?

Ulamas:

1. WhatisyourassessmentofcorruptionamonggovernmentofficialsingeneralandtheofficialsoftherevenuedepartmentoftheMinistryofFinanceinparticular?

2. Whatdoyouthinkarethereasonsforcorruption?

3. Howmanytypesofcorruptiondoyouknoworhaveyouheardabout?List.a. b. c. d.

4. Haveyoueverfacedcorruption?Ifyes,whatisyourpersonalexperienceoffacingcorruption?5. HowiscorruptionaddressedinShariaandtheQuran?Describe.6. WhydosomeAfghans,asMuslims,takebribes?

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7. HowyoueversolvedacorruptioncasebyreferringtoIslamicvalues?Ifyes,describe.

8. Doyouthinkmosquesshouldbecomeinvolvedinanti-corruption?Ifyes,how?Describe.

9. Doyouthinkpublicawarenessthroughmosquesaboutcorruptionanditsconsequenceswouldbehelpful?Ifyes,describe.

10. Doyouthinkwomenfacecorruptiondifferentlythanmen?How?Describe.

11. Whatareyoursuggestionstocurb/reducecorruption?

12. IsthereanythingelsethatIhavenotaskedyouandyouwouldliketoshare?

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Appendix3:SurveyQuestionnaire

City,Province Researcher’sName Datesofinterview Profileofinterviewee:1. Age:2. Sex

§ Male§ Female

3. Education• Grade6• Grade12• Grade14• Universitydegree

4. Whatsectordoyouworkin?

§ NGO§ Constructionsector§ Trade(tejarat)§ Healthsector§ Educationsector§ Businessmanagementconsultancies(e.g.taxfixerssuchasAfghanHoldingGroup,Omran

HoldingGroup,others)§ Securityservices§ Electricalservices(wholesale,maintenance,both)§ Plumbingservices(wholesale,maintenance,both)§ Other(Specify):__________________________

5. Yourpositionintheorganization:

• Owner/operator• Finance• Administration• Other(Describe):_________________________________

CorruptionMechanisms:6. WhichMTODepartmentsdoyoureportto?(list)

• • • •

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7. HowdoyoudealwiththeMTO/RevenueDepartment?• Anappointedmemberofourorganizationdealswiththemdirectly.• Aconsultanthiredbytheorganizationdealswiththemdirectly• ContactswithintheMTO• Dealingsareoutsourcedtoanagent(komission-kar)indicatedbytheMTO• Other(specify)

8. HasMTOeverrequestedfromyourcompany/organizationtopayextramoneydirectlytoanMTO

employee?§ Yes.Whatamount?______________________§ Explainwhy:_______________________________________________________________

______________________________________________________________________________________________________________________________

§ No9. HaveyoueverbeenthreatenedbyanMTOofficialbecauseyoudidnotcooperatefullywithMTO?If

yes,describe.________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

10. OnwhatbasisdoesMTOdemandextrapayment/bribesfromtaxpayers?(multipleanswers

possible)• Offertoprocessafilequickly• Offertoreducethetotalamountoftaxpayable• Offertoreduceapenaltyforlatetaxpayment• Offertogetaclearancelettertoresolvemiscalculationorlatepaymentoftaxes• Other:_________________________________________________________

11. DoyouthinkmenandwomenexperiencecorruptiondifferentlyinMTO?

• Yes(How?Describe?)• No

12. Inyouropinion,whydoorganizations(ortheirfinancepersonnel)paybribestoMTO?(Describe)13. WhathappensifanorganizationrefusestopaybribestoMTO?(Describe)DealingwithCorruption14. Whoinyourorganizationknowsabouttaxregulations?(Nameofposition)15. DoyouhaveacopyoftheTaxCodeandrelatedlawsonyourpremises?(Describe)

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16. HowdoyoukeepuptodateonchangestotheTaxCodeandrelatedlaws?(Describe)• RevenueDepartment• Consultant• Agent(komission-kar)• Other(listanddescribe):_______________________________________________

______________________________________________________________________________________________________________________________________________________________________________________________________

17. DoesyourorganizationrefertotheTaxLawanditsamendmentswhendealingwiththeRevenue

Department?• Yes• No

18. DoesyourorganizationeverdisagreewiththeRevenueDepartment’sassessmentoftaxesand/or

penaltiespayablebyyourorganization?• Yes(describeandgiveexamples)• No

19. WhathappenswhenyourorganizationdisagreeswithMTO’sassessmentoftaxesand/orpenaltiesowed?(Describe)

20. Doyouknowofanylawsthatprotecttaxpayersagainstcorruption?• Yes(listanddescribe)_______________________________________________________________________________________________________________________

• No

21. Doyouknowoforganizations(governmentandnon-government)thatprotectthosewhocomplain

aboutcorruptionintheRevenueDepartment?• Yes(listanddescribe)_________________________________________________

____________________________________________________________________________________________________________________________________

• No

22. Whichthree(3)ofthefollowingentitiesarethemosteffectiveinfightingcorruptionwithintheRevenueDepartment?

§ President’sOffice§ OfficeoftheSpecialRepresentativeforReformandGoodGovernance§ MinistryofFinance§ MinistryofHajjandReligiousAffairs§ Privatesectorbusinesses§ Privatesectorassociations§ Nongovernmentorganizations§ Non-governmentassociations§ Internationaldonors

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§ Civilsocietyorganizations§ Thejusticesystem§ Religiousleaders§ Other:___________________________________________________

23. AreyouwillingtoreportcasesofextortionwithintheRevenueDepartment?

§ Yes § No(Why?)

24. Inyouropinion,underwhatconditionswillprivateandpublicorganizationsfightbribetakingby

corruptMTOofficials?25. Hasyouorganizationeverreportedacaseofextortion?

§ Yes(Describe)_____________________________ § No

26. WhatkindofassistancewouldyouneedtofightcorruptionwhendealingwiththeRevenue

Department?(Interviewer:DONOTPROMPT)§ Morelawsagainstcorruption§ UsingIslamicvaluesagainstcorruption(describehow)§ Legalassistancebyaspecializedlawyer§ TrainingonTaxLaw§ Familiaritywithlawsaboutcomplaint§ Familiaritywithcomplaintmechanisms§ TechnicalassistanceonreportingtotheRevenueDepartment§ Beingpartofanorganizednetworkoftaxpayersmobilizedagainstcorruption§ Other(Describe):__________________________________________________________

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Appendix4:KeyInformantCodingProtocols

HeratConstructionCompaniesKI-M-Her-CC-MTO-1:KI=KeyInformant,M=Male,Her=Herat,CC=ConstructionCompanies,MTO=MediumTaxPayersOffice,1=SequenceServiceCompaniesKI-M-Her-SC-MTO-1:KI=KeyInformant,M=Male,Her=Herat,SC=ServiceCompanies,MTO=MediumTaxPayersOffice,1=SequenceTradeCompaniesNone.CraftsmenUnionKI-M-Her-CU-STO-6:KI=KeyInformant,M=Male,Her=Herat,CU=CraftsmenUnion,STO=SmallTaxPayersOffice,6=SequencePrivateHospitalsKI-M-Her-PH-MTO-1:KI=KeyInformant,M=Male,Her=Herat,PH=PrivateHospitals,MTO=MediumTaxPayersOffice,1=SequencePrivateRestaurantsKI-M-Her-PR-MTO-1:KI=KeyInformant,M=Male,Her=Herat,PR=PrivateRestaurant,MTO=MediumTaxPayersOffice,1=SequencePrivateWeddinghallKI-M-Her-PW-MTO-1:KI=KeyInformant,M=Male,Her=Herat,PW=PrivateWeddingHall,MTO=MediumTaxPayersOffice,1=SequenceNon-GovernmentalOrganizationsKI-M-Her-NG-MTO-1:KI=KeyInformant,M=Male,Her=Herat,NG=Non-GovernmentOrganization,MTO=MediumTaxPayersOffice,1=SequenceBusinessWomenKI-M-Her-BW-MTO-1:KI=KeyInformant,F=Female,Maz=Mazar,BW=BusinessWomen,MTO=MediumTaxPayersOffice,1=Sequence

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PrivateSchoolsKI-M-Her-PS-MTO-1:KI=KeyInformant,M=Male,Her=Herat,PS=PrivateSchools,MTO=MediumTaxPayersOffice,1=SequenceTransportationCompaniesKI-M-Her-TRC-MTO-1:KI=KeyInformant,M=Male,Her=Herat,TRC=TransportationCompanies,MTO=MediumTaxPayersOffice,1=SequenceKabulConstructionCompaniesKI-M-Kab-CC-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,CC=ConstructionCompanies,MTO=MediumTaxPayersOffice,1=SequenceServiceCompaniesKI-M-Kab-SC-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,SC=ServiceCompanies,MTO=MediumTaxPayersOffice,1=SequenceTradeCompaniesKI-M-Kab-TC-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,TC=TradeCompanies,MTO=MediumTaxPayersOffice,1=SequenceCraftsmenUnionKI-M-Kab-CU-STO-5:KI=KeyInformant,M=Male,Kab=Kabul,CU=CraftsmenUnion,STO=SmallTaxPayersOffice,5=SequencePrivateHospitalsKI-M-Kab-PH-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,PH=PrivateHospitals,MTO=MediumTaxPayersOffice,1=SequencePrivateRestaurantsNone.PrivateWeddingHallsKI-M-Kab-PW-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,PW=PrivateWeddinghall,MTO=MediumTaxPayersOffice,1=SequenceNon-GovernmentalOrganizationsKI-M-Kab-NG-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,NG=Non-GovernmentOrganizations,MTO=MediumTaxPayersOffice,1=Sequence

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BusinessWomenKI-M-Kab-BW-MTO-1:KI=KeyInformant,F=Female,Kab=Kabul,BW=BusinessWomen,MTO=MediumTaxPayersOffice,1=SequencePrivateSchoolsKI-M-Kab-PS-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,PS=PrivateSchools,MTO=MediumTaxPayersOffice,1=SequenceTransportationCompaniesKI-M-Kab-TRC-MTO-1:KI=KeyInformant,M=Male,Kab=Kabul,TC=TransportationCompanies,MTO=MediumTaxPayersOffice,1=SequenceKandaharConstructionCompaniesKI-M-Kan-CC-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,CC=ConstructionCompanies,MTO=MediumTaxpayersOffice,1=SequenceServiceCompaniesKI-M-Kan-SC-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,SC=ServiceCompanies,MTO=MediumTaxPayersOffice,1=SequenceTradeCompaniesKI-M-Kan-TC-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,TC=TradeCompanies,MTO=MediumTaxPayersOffice,1=SequenceCraftsmenUnionKI-M-Kan-CU-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,CU=CraftsmenUnion,MTO=MediumTaxPayersOffice,1=SequencePrivateHospitalsKI-M-Kan-PH-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,PH=PrivateHospitals,MTO=MediumTaxPayersOffice,1=SequencePrivateRestaurantsKI-M-Kan-PR-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,PR=PrivateRestaurant,MTO=MediumTaxPayersOffice,1=SequencePrivateWeddingHalls

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KI-M-Kan-PW-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,PW=PrivateWeddinghall,MTO=MediumTaxPayersOffice,1=SequenceNon-GovernmentalOrganizationsKI-M-Kan-NG-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,NG=Non-GovernmentOrganization,MTO=MediumTaxPayersOffice,1=SequenceBusinessWomenKI-F-Kan-BW-MTO-1:KI=KeyInformant,F=Female,Kan=Kandahar,BW=BusinessWomen,MTO=MediumTaxPayersOffice,1=SequencePrivateSchoolsKI-M-Kan-PS-MTO-1:KI=KeyInformant,M=Male,Kan=Kandahar,PS=PrivateSchools,MTO=MediumTaxPayersOffice,1=SequenceMazar-eSharifConstructionCompaniesKI-M-Maz-CC-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,CC=ConstructionCompanies,MTO=MediumTaxPayersOffice,1=SequenceServiceCompaniesKI-M-Maz-SC-STO-9:KI=KeyInformant,M=Male,Maz=Mazar,SC=ServiceCompanies,MTO=SmallTaxPayersOffice,9=SequenceTradeCompaniesKI-M-Maz-TC-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,TC=TradeCompanies,MTO=MediumTaxPayersOffice,1=SequenceCraftsmenUnionKI-M-Maz-CU-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,CU=CraftsmenUnion,MTO=MediumTaxPayersOffice,1=SequencePrivateHospitalsKI-M-Maz-PH-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,PH=PrivateHospitals,MTO=MediumTaxPayersOffice,1=SequencePrivateRestaurantsKI-M-Maz-PR-MTO-1:

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KI=KeyInformant,M=Male,Maz=Mazar,PR=PrivateRestaurant,MTO=MediumTaxPayersOffice,1=SequencePrivateWeddinghallKI-M-Maz-PW-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,PW=PrivateWeddinghall,MTO=MediumTaxPayersOffice,1=SequenceNon-GovernmentalOrganizationsKI-M-Maz-NG-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,NG=Non-GovernmentOrganization,MTO=MediumTaxPayersOffice,1=SequenceBusinessWomenKI-M-Maz-BW-STO-5:KI=KeyInformant,F=Female,Maz=Mazar,BW=BusinessWomen,STO=SmallTaxPayersOffice,5=SequencePrivateSchoolsKI-M-Maz-PS-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,PS=PrivateSchools,MTO=MediumTaxPayersOffice,1=SequenceTransportationCompaniesKI-M-Maz-TRC-MTO-1:KI=KeyInformant,M=Male,Maz=Mazar,TRC=TransportationCompanies,MTO=MediumTaxPayersOffice,1=SequenceNangarharConstructionCompaniesKI-M-Nan-CC-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,CC=Constructioncompanies,MTO=MediumTaxPayersOffice,1=SequenceServiceCompaniesKI-M-Nan-SC-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,SC=ServiceCompanies,MTO=MediumTaxPayersOffice,1=SequenceTradeCompaniesKI-M-Nan-TC-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,TC=TradeCompanies,MTO=MediumTaxPayersOffice,1=SequenceCraftsmenUnionKI-M-Nan-CU-MTO-1:

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KI=KeyInformant,M=Male,Nan=Nangarhar,CU=CraftsmenUnion,MTO=MediumTaxPayersOffice,1=SequencePrivateHospitalsKI-M-Nan-PH-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,PH=PrivateHospitals,MTO=MediumTaxPayersOffice,1=SequencePrivateRestaurantsKI-M-Nan-PR-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,PR=PrivateRestaurants,MTO=MediumTaxPayersOffice,1=SequencePrivateWeddingHallsNone.Non-GovernmentalOrganizationsKI-M-Nan-NG-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,NG=Non-GovernmentOrganization,MTO=MediumTaxPayersOffice,1=SequenceBusinessWomenKI-M-Nan-BW-MTO-1:KI=KeyInformant,F=Female,Nan=Nangarhar,BW=BusinessWomen,MTO=MediumTaxPayersOffice,1=SequencePrivateSchoolsKI-M-Nan-PS-MTO-1:KI=KeyInformant,M=Male,Nan=Nangarhar,PS=PrivateSchools,MTO=MediumTaxPayersOffice,1=SequenceTransportationCompaniesKI-M-Nan-TRC-LTO-5:KI=KeyInformant,M=Male,Nan=Nangarhar,TC=TransportationCompanies,LTO=LargeTaxPayersOffice,5=Sequence