Kalpataru Projects International Ltd has been hit with a significant tax notice from the Taliban-led government of Afghanistan. The notice, dated August 26, 2024, concerns the company’s failure to file necessary declarations for the financial years 2020-21 and 2021-22.
According to the notice from the Ministry of Finance, Afghanistan Revenue Department, Kalpataru Projects faces a total tax demand of AFN 8,774,153 (approximately Rs.1.04 crore). This amount includes an additional tax of AFN 12,150 (about Rs.14,000) and a fine of AFN 166,401 (around Rs.1.98 lakh). The company hopes that once the primary tax liability is cleared, the Afghan authorities might consider waiving the additional tax and fines.
In addition to this, Kalpataru Projects has also received a tax demand from Indian GST authorities. They are required to pay ₹10.50 lakh in tax, along with a penalty of ₹1.50 lakh plus interest.
Kalpataru Projects International Ltd is a prominent player in the EPC (engineering, procurement, and construction) sector, with expertise in power transmission, water supply, railways, urban mobility, and other major infrastructure areas.
The Taliban, experienced in tax collection, have a history of taxing farmers, shopkeepers, businesses, and NGOs in their controlled regions. Instead of investing this revenue in public services, they directed it towards their war efforts. When they seized control of various districts and cities in Afghanistan during the summer of 2021, they quickly established a tax collection system. This included not only income and business taxes, similar to those imposed by the previous Republic, but also ‘Islamic taxes’—ushr, a tithe on harvests, and zakat, a wealth tax typically levied on livestock. Unlike the Republic, which did not impose these Islamic taxes, the Taliban’s new system marks a significant shift in resource distribution from the rural economy to the Afghan state.
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