Additional Taxes within the Afghanistan Tax Affairs Management Law
Additional tax is a type of tax that is imposed on a taxpayer due to the taxpayer’s failure to pay tax. The fines imposed by court upon the taxpayer due to such failure do not fall under this definition.
Chapter 9 of the Tax Affairs Management Law of Afghanistan describes instances in which a taxpayer failed to pay taxes according to the law and is therefore, obligated to pay additional taxes.
According to the provisions of the above law, additional taxes are imposed when a taxpayer: delays paying of the payable tax, does not provide tax documents, fails to withhold withholding taxes, does not provide records and books, does not request tax identification number, evades taxes, does not obey notices, does not provide information, provides incorrect and misleading tax declaration forms, and when fails to obey the provisions of the value added tax Law.
Additional tax when a delay occurs in paying of taxes:
According to article thirty-four of the Tax Affairs Management Law, a taxpayer must pay 0.10 percent additional tax on the total payable tax the payment of which was delayed by the taxpayer. The provision further clarifies that the above additional percentage of tax is chargeable to the taxpayer for each day that such a delay occurs.
Additional tax due to failure to provided tax documents:
This issue is covered by article thirty-five of the Tax Affairs Management Law. According to the above article, if a taxpayer is not able to provide to the tax office, tax declaration forms and other appropriate tax documents that must be filed according to the law, the tax payer must pay additional tax unless the tax payer has a proper reason for the delay. The additional tax for this offense is 30 Afghanis for individuals and 100 Afghanis for legal entities for each day of delay.
It must be further stated that if the tax payer did not file for taxes for the purpose of tax evasion, the taxpayer does not only must pay the additional tax, the taxpayer will also be introduced to the Department of Legal Matters, and then to the Attorney’s Office.
Additional Tax if withholding tax is not paid or not withheld:
If a taxpayer does not withhold or pay the withholding tax, the taxpayer must pay 10 percent of the payable tax to the government.
Additional taxes when proper financial record is not provided:
If a taxpayer fails to keep and provided financial records according to the law, the taxpayer is obligated to pay 5000 Afghanis additional tax if it is an individual and 20,000 Afghanis additional tax if it is a legal entity.
Additional tax when a tax identification number is not requested:
According to article forty-two of the Tax Affairs Management Law, if a taxpayer who is obligated to obtain a tax identification number does not request such a number, without providing a proper reason, the taxpayer must pay 5000 Afghanis additional tax if its an individual, or 20,000 Afghanis additional tax if it is a legal entity.
Additional tax in case of tax evasion:
Intentional tax evasion is the most serious type of tax violations that is covered by article forty-one of the Tax Affairs Management Law. According to this article, if a person intentionally evades taxes, the tax payer must pay not only the original evaded taxes, but also double of the amount of the original taxes as additional tax, provided that it is the taxpayer’s first occasion of tax evasion. If the taxpayers intentionally evade taxes for the second time, the taxpayer must pay the original tax, the additional applicable tax, and the business activity of the taxpayer may be canceled per an order of the court.
Additional tax when the taxpayer does not comply with notice:
If a taxpayer does not comply with a notice that is issued to the taxpayer by a tax office and according to the law, such a taxpayer must pay a 10 percent of the payable tax as additional tax, provided that the taxpayer lacks proper reason for complying with the notice.
Additional tax when information is not provided:
If a taxpayer fails to provide to the tax office information required under article 27 of the Tax Affairs Management Law, such a taxpayer, if individual, must pay 100 Afghani and if a legal entity, must pay 200 Afghanis per each day of failure to provide such information.
Additional tax for providing incorrect and misleading tax declaration form:
According to article four of the Tax Affairs Management Law, if a taxpayer provides an incorrect or misleading tax declaration forms, or if the taxpayer redacts part of such forms, such that will cause a decrease in the amount of payable taxes of the taxpayer, such a taxpayer must pay 25 percent of the payable tax as additional tax.
Additional tax for failure in value added tax:
According to chapter three of Value Added Tax Law, if a taxpayer is an individual and did not pay value added tax, it must pay 5000 Afghani as an additional tax. If a taxpayer is legal entity that did not pay the value added tax, it must pay 20,000 Afghanis in additional taxes, provided that neither has an appropriate reason for the violation. If a taxpayer uses a fraudulent certificate of capital gain taxes, such a taxpayer if an individual is obligated to pay 10,000 Afghanis of additional tax, and if a legal entity, must pay 40,000 Afghanis of additional tax.
Also if a person is found to have issued incorrect and fraudulent certificates of value added tax, the person must pay a 25 percent of the tax difference as additional tax. If an individual violates any terms of the value added tax law, the individual must pay 1000 Afghanis, and if it is a legal entity that violated the aforementioned law, it must pay 4000 Afghanis as additional tax.
It must be stated that, according to chapter ten of the Tax Affairs Management Law, the fines imposed by a court of proper jurisdiction upon a taxpayer due to the taxpayer’s tax violations are separate from these additional taxes, and are payable separately and in addition to the above additional taxes by the taxpayer who violated the law.