Saturday, October 3, 2009

Help Afghanistan, Pay Taxes

Even though the international community has poured billions of dollars worth of aid into Afghanistan since the end of Taliban rule eight years ago, the country remains one of the most desperately poor places on Earth. In yesterday's New York Times, Peter Bergen and Sameer Lalwani proposed a novel solution to the problem - let Afghanistan tax foreign aid workers.

Like foreign troops, the presence of foreign aid workers in their country is a sore point for many Afghanis. Primarily, they question what exactly is the benefit these foreigners are bringing to their country. As the authors of the NYT piece point out foreign 'technical advisors' are well paid for their efforts, making on average $9,000 to $20,000 per month - for comparison, their Afghani counterparts often earn less than $1,000 per year. Thanks to these salaries, some estimates say that 40% of the foreign aid sent to Afghanistan then quickly leaves the country in the pockets of foreign advisors.

So, Bergen and Lalwani ask, why not let the Afghanis tax the huge salaries of these consultants? Afghanistan's top tax bracket is only 20%, yet the authors say a levy against foreign advisor's salaries could generate nearly a half-billion per year in revenues for Afghanistan - nearly double the government's current haul from taxation. But more than that, it could also help Afghanis to think that foreign advisors are in their country to do more than just earn a quick buck.
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