Taliban tax racket hinders peace talks
The Taliban’s strong-arm tax collection tactics in areas under its control are just one reason Afghan President Ashraf Ghani and many of the country’s 38 million citizens are opposed to any potential power-sharing arrangement with the militant group.
The Taliban collects as much as $1.5 billion a year from Afghan businesses in mafia-like deals, control over the drug trade and donations from abroad, a United Nations Security Council report said last year. That’s equal to roughly 25% of the government’s annual budget.
Still, Afghanistan’s elected leaders may have no choice but to work with the Taliban as President Joe Biden prepares to withdraw the remaining 2,500 American troops by a Sept. 11 deadline.
“If they do want to rule Afghanistan, either by sharing power or taking it by force, they will either have a great deal of adaptation to undergo or their regime will face just as much poverty — and as many difficulties — as it did in the 1990s,” said Andrew Watkins, a senior analyst with International Crisis Group. “Whether they would adapt once they reach that point, and do away with the more predatory elements of taxation, is hard to foresee.”
Talks on a peace plan have stalled since Biden’s announcement, with the Taliban refusing to participate in a U.S.-sponsored summit in Istanbul that had been scheduled to start on April 24 but is now delayed until more than three weeks after Ramadan. Ghani is unhappy at being forced into a U.S.-led peace deal with the Taliban, which refuses to recognize his authority in Afghanistan even as it regularly met with representatives from his government in Doha, Qatar.
The Taliban taxation deals show a political settlement in Afghanistan remains far away even as Biden plans to pull out troops, according to Omar Samad, a senior analyst at Atlantic Council and former Afghan ambassador to Canada and France.
“The Afghan war needs to end as part of a political process that brings all main factions around a peace table to discuss and agree on a future political settlement,” he said. “Once that is done, only then can we assure a unified and reformed taxation system that addresses corruption and double taxation challenges that exist in the country.”
The UN Security Council has described the Taliban’s operations as an extensive “criminal enterprise that involves levying taxes on almost all infrastructure, utilities, agriculture and social industry in areas under their control or influence.” In northern provinces the Taliban also taxes teacher salaries and extorts money from motorists on highways, according to Saifura Niazi, an Afghan member of parliament from Balkh province.
Niazi added that the group’s gains on the battlefield have boosted confidence it has the upper hand in talks with the U.S. “That means the government’s influence is declining and the Taliban’s control over local populations seems to be expanding.”
Balkh province is home to Afghanistan’s only fertilizer factory. After its operator refused to pay the Taliban last year, insurgents blew up a part of a 35-mile pipeline transferring gas from neighboring Shebergan city to the factory.
The plant needs the pipeline’s gas for the 14-megawatt power plant that runs its outdated machines. The factory closed for several months until Ghani’s administration fought the Taliban to repair it, resulting in the death of several government troops. But its owners are still paying the Taliban.
A Taliban commander confirmed the group receives funds from the plant. “The pipeline passes through our territory and they have to pay for it,” said Gul Hamdard, who negotiated terms with Abdul Ahad Wahidi, the factory’s union leader. Local government officials in Balkh province were not immediately available for comment.
Wahidi and other workers at the factory pay over 14% of their wages to the Taliban — nearly five times more than they pay the government in taxes.
“The sad truth is that we are really working for the Taliban, not for the government,” said a worker at the plant, who didn’t want to be named due to the sensitivity of the issue. “We are unfortunately funding their deadly insurgency.”