Based on proposal of MoF in 2005 on amending income tax law, the law on Sukook is repealed effective from March 21, 2009. Exemption of Sukok by MoF, in light of implementation of ANDS, which emphasizes on providing facilities for entrepreneurs and development of private sector, is considered valuable. This action of the government was supported and encouraged by many of those who are involved in the area of trade and investment. After establishment of ACBR within MoCI to provide facilities and streamline trade activities in the country, another step was taken to amend the Income Tax Law and the MoF also showed its preparedness in this regard by repealing Sukook Law to provide facilities and simplify trade activities for private entrepreneurs. Exemption of Sukook referred to the Parliament after it was proposed by the MoF in 2005; became effective from March 21, 2009 after it was passed by Parliament and endorsed by the President. What is Sukook and when was it created? Sukook was an amount of money taken by the government from customers or entrepreneurs for services rendered to them. Sukook law did not exist in any other countries of the world. Therefore, Afghanistan also repealed Sukook Law to encourage investment, develop private sector and bring it with international standards. The Law on Sukok containing two chapters and seven articles, was approved on Jun 29, 1982. Chapter 1, General Provisions and Article 1 of this Law provides as follow: Sukook shall be taken from legal and natural persons for tax assessment services. 1. Selling and buying of share of capital and capital registration
2. Bank Loans and Credits
3. Bank Letter of Credit to import goods
4. Merchant declaration
5. Written or oral contract of supplying goods and services by legal and natural persons whether domestic or foreign.
6. Salary incomes of civil servants and NGOs employees.
7. Guilds flat tax
8. Sale of vehicles
9. Income of brokers
10. Income of cinemas
11. Income of clinics and educational courses
12. 1% of initial capital at the start of a business. All these, were services rendered by government and came under the Sukook Law which was repealed from Mar 21, 2009. . Establishing a Tax System Consistent with International Practices and Encouraging Investors Mr. Shams, In charge of the MoF Press Office considers incentives of this action as encouragement of entrepreneurs to legal activities. He believes that setting up of a tax system consistent with international practices will encourage both investors and traders to invest in Afghanistan and also it is a very good method for collection of taxes. “There are also other exemptions in addition to revocation of Sukook Law so that they may encourage tax payers to abide by the law and to clear up their overdue taxes. These are exemptions of overdue taxes arising from tax obligations of natural and legal persons prior to 1381 (2002), and exemption of tax fines (1381/2002- 1385/2006) in case tax payer pays his/her original overdue taxes related to this period within three months after the promulgation of this law (Mar 21-Jun 21, 2009). This by itself will pave the way for resumption of trade and investment in the country and also lightens the heavy burden of taxes and fines and will have a good outcome. These changes will be effective from Mar 21, 2009.” Mr.Shams added.
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