December 26, 2017
As the financial year draws to an end, the Afghan government has delivered on its fiscal reforms promises for the year 1396.
In a press conference held yesterday in Kabul, Minister of Finance Eklil Hakimi said the government exceeded its revenue collection target by 16.6 billion Afghanis this year, and also increased expenditures on development budgets, compared to previous years.
“In 1393 the national budget expenditure was 44% at the government level,” Minister Hakimi said yesterday. “When the new government took office in 1394, the national budget expenditure rose to 53.8 %, in 1395, it reached to 54% and in 1396 to 67%.”
The increase in revenues and expenditures is a result of fiscal reforms in the government, including tax reforms, budget transparency, and efforts to cut corruption, and exhibits increased efficiency and capacity in government’s ability to deliver services, programs, and projects to the Afghan people.
Earlier this month, the Executive Board of the International Monetary Fund (IMF) completed its second review of the Extended Credit Facility program for Afghanistan. All targets and performance criteria were met by the Afghan government.
Following the review, Mr. Mitsuhiro Furusawa, First Deputy Managing Director and Acting Chair, said:
“The Government of Afghanistan remains committed to implementing sound macroeconomic policies and structural reforms to boost inclusive growth and employment for the country’s rapidly rising population, and reduce aid dependency.”
He added that the government is on track moving forward, stating, “The authorities’ macroeconomic policy mix, aimed at maintaining fiscal and external stability with low inflation and a flexible exchange rate, is appropriate going forward. These policies can help mitigate the impact of insecurity and political uncertainty.”
The World Bank also recognized the government’s fulfillment of its reform commitments this month, contributing 46 million USD as an incentive grant to the Ministry of Finance. Achievements included amendment of the Tax Law, Income Tax Law, designation of the procedure for resolving tax disputes and reducing its payable amount from 50% to 30%, and the commencement of the initial phase of electronic declarations.
The Afghan economy continues to grow. Real GDP grew by 2.4 percent in 2016, credited partially to higher agricultural output, which was an increase from 1.3 percent in 2015. For 2017, growth is projected at 2.5 percent, with projections reaching 3 percent for 2018, according to the IMF.
For more information:
Ministry of Finance: www.mof.gov.af