ISLAMABAD, Nov 29: Pakistan would formulate taxation system for Afghanistan when a new broad-based government is installed in Kabul.

Under the scheme, the Pakistani taxation authorities will provide technical assistance as well as a plan for an effective taxation establishment to be put in place in Kabul, a highly informed source told Dawn on Thursday.

The project has been initiated following the decision of the US-led coalition to start reconstruction of the war-ravaged country.

Some taxation officials of Pakistan, along with other countries officials, are already working in the East Timor under the aegis of the United Nations.

Similarly, an official of the income tax department, Chaudhry Sadiq, the then additional commissioner income tax had prepared an income tax system for the Malaysian government in 1970’s, which according to the source was so effective that now the Pakistani income tax officials got training from Malaysia tax officials.

To give final shape to the call of the world bodies, the issue of the establishment of taxation system in Afghanistan was deliberated at length in the last cabinet meeting.

Following the meeting, the source said, a directive was sent to the Central Board of Revenue (CBR) asking to come up with proposals for chalking out an active taxation system for Afghanistan.

The tax authorities would be assigned the task of preparation of customs tariff for that country.

Since there was no check post on the Afghan boarders to stop the smuggling of goods and narcotics into that country and its smuggling back into the neighbouring countries, the tax authorities would also prepare anti-narcotics and anti-smuggling laws for the country.

Moreover, a data bank will be established within the taxation system for the compilation of the data related to exports and imports of the country.

“Only those taxation officials would be selected in the technical team who have know-how about the culture, tradition and language of Afghanistan,” the source said.

The tax authorities will chalk out a taxation system based on direct taxes and indirect taxes.

As Afghanistan is a landlocked country, therefore, the tax officials would work out the requirements for the establishment of dry ports along with personnel to be employed there to carry out the work.

Justifying the immediate need of the establishment of dry ports in Afghanistan, the source said, it would facilitate imports and exports of that country with neighbouring countries.

Presently as there was no proper system of taxation in that country, the immediate arrangement for the effective system would be necessary to support the development of the country.

To control Afghan transit trade, a customs tariff plan was prepared, the source said. But, according to the source, the Rabbani government did not respond favourably to the effort of Pakistan government. Besides, Pakistan also prepared the custom tariff in Dari language.