PUBLIC PRIVATE DIALOGUE Report – Kabul

 

Date and Time Tuesday, January 28, 2020 (9am-12:30pm)
Venue Park Star Hotel, Kabul
Topic(s) 1.     Challenges of Street Vendors in Kabul

2.     Implementation of the Tax Clearance Certificate (TCC) within 21 days

3.     Simplifying Business Closure Procedure

Supported By USAID
Number of Participants Invited 105
Number of Participants Attended 70

 

On January 28, 2020, the Executive Committee on Private Sector Development (PriSEC) organized the 5th Public Private Dialogue (PPD) event in the Kabul province on 3 prominent private sector issues. For better coordination, the Secretariat managed the event in coordination with key PriSEC stakeholders. The event was attended by representatives from the government, private sector, and the civil society.

 

Objectives

  • Increase awareness of PriSEC, its major achievements, and future plans
  • Discuss challenges of the micro and small enterprise, such as the street vendors in Kabul, that are currently under-represented or not well represented in the national committees
  • Identify barriers associated with the process of closing a business in Kabul; and identify solutions.
  • Identify challenges on implementation of the 21 days TCC issuance, and acquire commitment from the government and the private sector agencies on its effective implementation

Agenda

  • Welcome remarks by PriSEC
  • Recitation of Holy Quran and the National Anthem
  • Welcome remarks and speeches by PriSEC co-chair (MoEc), ACCI, and AWCCI
  • Presentation on PriSEC
  • Presentation on Challenges of the Street Vendors,
  • Presentation on 21 Days TCC issuance
  • Presentation on the Business Closure Process
  • A) Panel discussion on implementation of TCC issuance within 21 days and simplifying the business closure procedure
  • B) Panel discussion on the challenges of the street vendors in Kabul and proposed solutions
  • Remarks from PriSEC co-chair (MoIC) on the government’s commitment for the Private Sectors
  • Wrap up by MoEc and the panelists

Event Management

Facilitators: Rafiullah Sherzad (CEO, ACE) Arash Sahibi (Independent Consultant), and Akbar Danish (PriSEC Consultant, ACE)

 

Panelists: – Street vendors

  • Massoud Wighagh, Market Organizations Deputy Director, Kabul Municipality
  • Abdullah Barkazai, Director of Labor, MoLSA
  • Mahnaz Anwari, Director of Finance and Trade, MoEc
  • Hassan Sepahi, Chairman, ACSC
  • Ayesha Aziz, Chairwoman, AWBF

 

Panelists: – 21 Days TCC Issuance & Simplifying the Business Closure Procedure

  • Wali Ahmad Dawari, Deputy Director of ACBR, MoIC
  • Mohammad Anis Panah, Acting General Director, ARD
  • Ehsan Khosti, Acting General Director, ACD
  • Mansour Hedayat, Economic Affairs and Business Development Director, ACCI
  • Manizha Wafiq, Chairwoman, AWCCI
  • Siraj-ul-Haq Murad, Afghanistan Taxation Commission Chairman, ICC

Event Participants

The event was attended by 70 key representatives from government entities, private sector, and civil society/academia.

 

Participants

Public Sector

 

Private Sector

 

Civil Society/Other

MoIC ACCI University Lecturer
MoEc AWCCI Media Representatives
ARD ACIM University Students
ACD ICC Educational Center Representatives
Chief of Police ACSC
ACBR ACALS
Kabul Municipality AWBF
PriSEC ACE
MoLSA Private Companies including tax-payers
MoWA Fresh Fruit Association

 

Key Issues and Challenges Discussed

The following key issues and challenges were identified during the event:

 

Challenges of the Street Vendors

  • There are lack of mechanisms to control/manage the street vendors in Kabul.
  • Cartels such as Mafia and other illegal groups are involved in increasing number of street vendors in Kabul.
  • The government lacks specific agenda for the street vendors in the city.
  • Areas such as the “Company”, Pol-e-Sokhta, Sara-e-Shamali, Cinema Pamir, and Chowk areas are the most congested and have gone out of control of the government in Kabul.
  • There are many associations for one sector; Mafia and other illegal groups issue licenses for one sector to make the things out of the control of the government.
  • Street vendors are major cause for development of the informal economy and recently have become a major security threat for the citizens in Kabul.

 

Timeliness and challenges associated with the Business Closure:

  • The business owners lack basic information on the business closure procedure
  • Some business in Kabul lack standard operating procedures and technical resources such as qualified staff (lawyers, financial experts) and office spaces and proper financial records.
  • Vagueness of the ACBR procedures, such as the ambiguity between closing businesses and deactivating business.
  • Lengthy procedures for closing a business, without specific timelines for each step.
  • Lack of enforcement on having/opening a bank account as a requirement for registering a startups business.
  • Business lack the technical knowledge to comply with the documentation requirements of ARD

 

TCC issuance within 21 Days

  • Due to lack of capacity of the private sector, there are still challenges to fully implement the TCC issuance within 21 days.
  • Private sector chamber lacking capacity building programs to train and engage their members on the tax compliance related issues

Key Messages, Outcomes, and Recommendations:

After discussing the above issues, challenges and problems, some of the recommendations and proposed solutions are:

 

Challenges of the Street Vendors

  • The government manage/control the increasing number of street vendors.
  • Government should develop a national policy to control and monitor the street vendors in cities.
  • There should be a limit/ban on issuance of multiple licenses to one sector.
  • Work to be done on establishment of the night bazars for street vendors.
  • The government should work on establishment of bazars for women at specific areas of the city.
  • Efforts to be made on issuance of the specific licenses and plate numbers for the street vendors and cards, and their business operation areas to be specified.
  • The number of municipality staff to increase in order to better manage and control street vendors and to prevent police interference in controlling these vendors.

 

Timeliness and challenges associated with the Business Closure:

  • The ACBR One Stop Shop (OSS) to inform their clients while registering the clients businesses, about the steps and procedure for closing businesses.
  • All chambers are supposed to support their members in terms of raising awareness of their members on the issues of professional business conduct, and acquisition of technical experts such as lawyers, accounting and financial experts and similar capacities. The objective is to improve business models and comply with the standard business operations and procedures.
  • A regulation to be developed by MoIC to specify/separate the terms and procedures for closing a business and deactivating a business.
  • Work to be done on reducing the steps for closing a business by ARD and ACD
  • While the ACBR OSS provides TIN number to businesses, the entity should also open accounts for companies and make them able to pay their expenses such as taxes through these accounts
  • Discrimination against the businesses to be avoided at all government entities
  • Mobile and random audit/inspections on the businesses to eliminated
  • Companies who want to close their businesses for the purpose of establishing new businesses, should be given a special letter which they can use on expediting opening of the new company and acquisition of the relevant legal documents
  • The companies that are importers, should pay the taxes to the Afghan Customs Department (ACD), rather than at ARD
  • Companies which are working with the government on contractual basis, should provide copies of their contracts to ARD
  • Chambers need to encourage/enforce their members in providing the financial statements to ARD.

 

TCC issuance within 21 Days

  • Chambers to encourage/enforce their members to attend the ARD capacity building programs on paying taxes; the trainings are organized on each Thursday.
  • Chambers to inform their members on the Tax Accountants and using such services
  • Chambers to encourage their members on viewing and reading the ARD videos and guidelines on tax related reforms and procedures
  • Chambers to organize capacity building events for their members in order to familiarizing the members on Tax compliance and other business related issues.

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