The economics of Taliban finance

An example of Islamist governance can be found on the stretch of road from Kabul to the Mile 78 border crossing in south-west Farah province that borders Iran.

The road has more than 25 government checkpoints and a fee is charged at multiple points on the journey. By contrast, the Taliban who police the same road have far fewer checkpoints and give a receipt, so only a single payment is necessary.

Ibraheem Bahiss, an Afghanistan consultant at International Crisis Group, said the Taliban sought to portray themselves as better administrators. “Increasingly they began co-opting government infrastructure to offer [improved] service deliveries,” said Bahiss, explaining that the Taliban in some areas ensured that teachers and nurses showed up to work.

In recent years, the Taliban has widened its tax base from centuries-old taxes of oshr, a one-tenth tithe of harvest produce, and zakat, a religious tax of 2.5 per cent of disposable income for the poor, although collection is often lower.

In Nimroz province, levies on transit goods such as vehicles and cigarettes formed 80 per cent of Taliban revenues, ODI research concluded.

Illegal mining and taxes on imported fuel are further sources of funds. Taliban earnings on fuel imported from Iran were as high as $30m last year, according to the Alcis consultancy.

Here is the full FT story.  You will note that the “bandits” side of the Taliban are able to raise this revenue, in part, because Afghanistan suffers from the misfortune of being a landlocked country.  With sea routes as a possible alternatives to goods and services, such fiscal systems would be harder to pull off, for both the Taliban and the previous government, I might add.  Landlocked countries often have it tough.  (By the way, much of the rest of the article considers drugs as a revenue source.)


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