Regulatory updates - Afghanistan

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2021-05-21

Afghanistan postpones the VAT system implementation to 2022

Initially, the implementation of the VAT system was going to be rolled out on 21 December 2021 (first day of Jadi 1399). However, due to the ongoing COVID-19 pandemic, the Afghan government has deferred the VAT implementation to the next year.

The new VAT rate is proposed to be 10% for the majority of goods and services, while basic food and materials will be exempted from VAT.

This measure of VAT implementation is expected to allow the government to increase its revenues by 1,1% of the total GDP and thus create further economic growth for the country.

More information can be found in the Fiscal Strategy Paper by the Ministry of Finance (section 4.3).