Institute for War and Peace Reporting | Giving Voice, Driving Change

Customs Income Showdown

Karzai orders regional governors to hand over their tax revenues.

With as much as a billion dollars in customs taxes owed to the central government, President Karzai warned governors of border provinces this week that if they don’t start turning over the money he will resign.

The warning, issued in a televised speech to the Supreme Court on May 18, appears to have been heeded. After three days of meetings with the president, 11 provincial heads and two northern warlords signed an agreement to transfer frontier revenue to central government coffers.

But it’s unclear how Kabul officials will be able to enforce an agreement with men who have defied them for the past 18 months.

The government will send 11 delegations to the provinces on May 26 to collect the hundreds of millions of dollars owed to Kabul. Finance Minister Ashraf Ghani will head the delegation to Herat to confront governor Ismael Khan, who has run the province as a virtual personal fiefdom.

The head of each delegation will send a daily report to Defense Minister Mohammed Qasim Fahim on their activities and the response from governors. Fahim will report the results to Karzai, and at the end of the week the minister’s council will decide what to do about any problems that arise.

The agreement signed by the governors on May 20 has 13 articles, including provisions that they avoid interfering in the affairs of other provinces, keep clear distinctions between military and civilian posts, refrain from negotiating with foreign governments on behalf of Afghanistan and acquire permission from central government before leaving the country.

Karzai’s speech, together with the subsequent agreement, marks the first time the administration has pointed its finger directly at the illegal activities of warlords and regional commanders.

Karzai spokesman Zalmai Hewadmal told IWPR, “Ismael Khan, for example, interferes in the affairs of Badghis, Farah, and Faryab, while Gul Agha Sherzai [governor of Kandahar] interferes in Helmand, Nimroz, Farah and Uruzgan provinces. And Hazrat Ali [military corp commander of Jalalabad] interferes in Laghman, Kunar and Nuristan.

“This is the last chance for the commanders and governors. It would be good if they submit the revenues and don’t interfere in other provinces - or else the government will act against them.”

In his angry speech - which coincided with celebrations of the birthday of Prophet Mohammed - Karzai declared, “I promised the people in the Loya Jirga that if I didn’t succeed in [government] affairs, I would not lie,” he said.

“I have decided that if in the next two or three months the conditions of income, administrative affairs and other affairs do not improve, I’ll assemble the Loya Jirga and I’ll tell them that I didn’t succeed in government affairs. And I’ll show them who didn’t cooperate.”

The second Loya Jirga is to be convened in the autumn, to consider a revised constitution and the type of government that will rule the country. Elections for new representatives are scheduled for June 2004.

Karzai said his demand to the governors reflects the will of the people, who say it’s not fair that the clerks, police and soldiers in some provinces have lucrative salaries from customs income while the other 26 provinces live in poverty.

Karzai specifically named six border provinces that are not turning over their customs income. “Henceforth the government has decided that the income of Afghanistan, wherever it is - as in Mazar-e-Sharif, Kandahar, Herat, Nengarhar, Nimroz and Khost - should be turned in to the central treasury without any delay, excuse or reason. And from there [central treasury], it should be distributed to the provinces equally,” he said.

The six named by Karzai collect the most customs taxes, according to M Najeeb Azizi, economic adviser in the ministry of finance.

It was Karzai’s second angry speech to government officials, governors and commanders. Karzai fired 28 provincial officials in December, but some of them are still holding on to office.

Kabul citizens were sceptical about whether the governors’ acceptance of Karzai’s demands this week would amount to much.

Abdul Rauf Ghorbandi, a teacher at Istiqlal High School, said, “Karzai’s speeches sound good, but they are not carried out. The decisions of each government are carried out by an executive power, but I don’t know why Karzai doesn’t have this power.”

Abul Ahrar Ramizpur, teacher of Islamic law at Kabul University and head of Pro-Development Party, said Karzai’s mistake was in supporting and promoting low-level commanders after the collapse of the Taleban. He said the president should have exerted his authority long before now.

In addition to the 11 governors, two competing warlords who control the customs income from Mazar-e-Sharif also attended the gathering and signed the agreement: Atta Mohammed, commander of the seventh corps, and the deputy minister of defense, Abdul Rasheed Dostum. The two continue to engage in battles throughout northern provinces. The governor of Faryab did not attend because he was dealing with the problem, Interior Minister Ali Ahmad Jalali said.

Jalali said he considers this week’s agreement to be ground-breaking. “We have made a firm decision to transfer the customs income to the centre,” he said at a press conference on May 22.

“We will be successful because people are fed up with the local rulers. People don’t like to have the national income spent by them [the local commanders]. And the local authorities who are spending this income now have realised that they can’t continue this.

“The dissatisfaction of people has reached its peak. The government should prevent this or resign.”

Azizi told IWPR that last year the government received only 80 million US dollars in tax income from all 32 provinces. The actual annual amount generated by them is estimated at 650 million to a billion dollars. “It is possible that all the revenues will be transferred to the centre because the government has made a solid decision,” he said.

But one official in the finance ministry told IWPR that the government would be glad to collect half that amount.

Newspapers here reported this week’s developments prominently. Kabul Weekly ran a photo of the governors’ agreement. Mujahed, the title that represents the views of the Northern Alliance, said in an editorial that the president has made similar speeches, but had yet to act on them. The government-owned news agency, Bakhtar, published the entire text of the president’s speech, although there was no mention of his threat to resign.

Danish Karokhel and Rahimullah Samander are IWPR editors/reporters in Kabul.