Unfair taxation in Afghanistan costs US taxpayers millions and impacts our security

Unfair taxation in Afghanistan costs US taxpayers millions and impacts our security
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As most people focus on the new tax bill just passed by Congress and signed by President TrumpDonald TrumpFormer defense secretary Esper sues Pentagon in memoir dispute Biden celebrates start of Hanukkah Fauci says lies, threats are 'noise' MORE, another brewing tax issue could cost American taxpayers millions of dollars.

Afghan officials are demanding that the thousands of government contractors working in Afghanistan in support of the departments of Defense and State pay unsubstantiated taxes. These tax bills eventually will find their way back to the American taxpayer for payment.

The U.S. government already provides billions of dollars in support to Afghanistan and made an agreement to be exempt from these taxes at the national level — including those contractors who supported these efforts.


Yet local Afghan officials threatening the government contractors who provide critical support services such as medical, security, and logistics. These government officials threaten to yank business licenses, fail to renew visas, freeze bank accounts, seize passports and even imprison contractors who do not pay.

The International Stability Operations Association (ISOA) represents these contractors who support our government in fragile environments around the globe, including Afghanistan. Our members report that these practices in Afghanistan have gone unaddressed for so long that they are spreading into other countries including Iraq and several African nations.

Our members are facing the real possibility that they no longer may be able to carry out their duties supporting U.S. troops and other U.S. government officials. This will leave our partners who provide stability in Afghanistan, and around the globe, scrambling to fill the hole these contractors leave behind.

ISOA commissioned a white paper to expose this growing threat. It lays out how we have reached this point and describes the efforts made so far by senior officials at the departments of Defense and State.  

Armed with this report, I have joined with ISOA board members to meet personally with members of Congress, top Department of Defense and Department of State acquisition and policy officials, and Afghanistan’s ambassador to the United States.

Our research has found that our partners in Defense and State have taken this issue as far as they can with their counterparts in Afghanistan. It is now up to Congress to act — not only for the safety of our members, but also for the American taxpayers who ultimately will foot the bill.

We offer top line solutions in our paper that, at this point, only Congress can provide. Our recommendations include creating an official reporting system of demands for taxation by the host nation to U.S. government officials that includes the secretary of Defense; establishing laws that make it illegal to pay these unfair, unsubstantiated taxes in host nations; and redefining the “total force” of active-duty and reserve troops to include contractors in a manner that institutes accountability.

We also suggest a range of penalties for the nations and individuals found guilty of attempting to extract these unfair taxes. Any nation, such as Afghanistan, can face withholding of U.S. aid. U.S. citizens who work with the host nation and solicit, aid or abet the collection of unfair taxation could face criminal charges resulting in fines and repatriation. Non-U.S. citizens participating in these unfair taxes could face fines, freezing of assets and be denied visas.

Negotiations between our nations ebb and flow, and now are stalled. We no longer can afford to wait for Afghanistan and other host nations to decide this issue needs to be resolved. The lives and livelihoods of U.S. citizens are at stake. Afghanistan is just the most pressing problem.

We applaud Congress for making progress with U.S. tax reform, and we call upon members to use their momentum to save U.S. taxpayers millions more dollars by shutting down the unfair taxation in Afghanistan.

Howard R. Lind is president and executive director of the International Stability Operations Association (ISOA), a global partnership of private sector and nongovernmental organizations providing critical services in fragile environments worldwide.