AIE and internal Policy

Following the introduction of tax exemptions and facilitations, the Islamic Emirate of Afghanistan has raised the threshold of taxable revenues for businesses from 150,000 Afghanis to 2 million Afghanis and reduced the tax rate from 0.5% to 0.3% on amounts exceeding that threshold. This adjustment is set to take effect from the first day of Hamal 1403. These exemptions can have both positive and negative effects on the economy of Afghanistan. For example, they can improve the livelihoods of entrepreneurs and businessmen as the extra burden of consumption is lifted from their shoulders. Additionally, reduced consumption due to tax exemptions can lead to the development and improvement of businesses quantitatively and qualitatively, ultimately contributing to economic growth. Entrepreneurs can reinvest the exempted amounts into their businesses, leading to increased supply and employment in the economy, or they can spend it elsewhere, thus increasing demand. This simultaneous movement of supply and demand fosters economic growth.