Afghanistan's transition to Taliban rule has shrunk the economy by 40 per cent, pushing more children into menial work. EPA
Afghanistan's transition to Taliban rule has shrunk the economy by 40 per cent, pushing more children into menial work. EPA
Afghanistan's transition to Taliban rule has shrunk the economy by 40 per cent, pushing more children into menial work. EPA
Afghanistan's transition to Taliban rule has shrunk the economy by 40 per cent, pushing more children into menial work. EPA


The case for funding the Taliban


  • English
  • Arabic

November 23, 2021

The Taliban doesn’t deserve money. The militant group took power in Afghanistan after a 20-year campaign of brutality and war crimes. And after it took power, it revealed itself to be both unwilling and entirely incapable of governing a state that can function in the modern world. The only benefit it has brought is a spurious reduction in levels of petty crime, though its heavy-handedness and the culture of ethnic chauvinism in its ranks have only polarised the country further, presaging more insecurity and violence to come.

The Taliban certainly doesn’t deserve money from people abroad, given through their taxes or charity. Consequently, hundreds of millions of dollars of aid previously allocated for Afghanistan by the World Bank and the IMF is now being withheld. But the humanitarian argument for releasing it is clear.

The world’s largest aid agencies have given a barrage of warnings about this over the past month. The data is so stark and so plentiful that it is easy to become desensitised to it, but it is worth hearing anyway. The Afghan economy has shrunk by 40 per cent since the Taliban takeover in August. Banks are almost completely out of cash. There is only $4 billion left in the Afghan economy – about $100 per person – and only $500,000 of it (about $0.01 on the dollar) is in circulation. The rest is tucked under mattresses in homes, because people know how bad things are about to get.

Ninety per cent of the population is expected to be in poverty by next spring. And, as the executive director of the World Food Programme pointed out this week, 23 million people – more than half the country – face acute food insecurity. In other words, they are on the brink of starvation. WFP needs $2.4 billion to keep them alive.

The Taliban does not even deserve Afghanistan’s money. More than $9bn of Afghan government foreign exchange reserves are currently frozen, locked up in US and European banks. The argument for continuing to withhold those funds, and to deny any further income or savings by way of sanctions, is straightforward, using the logic of carrots and sticks to negotiate with the Taliban to change.

Perhaps the international community wants to see a different Afghanistan – one with a more inclusive government that has more respect for women – and don’t want to release a penny until they see it. Many US lawmakers certainly want to see it. “The only leverage we have left on the Taliban are these assets that we have frozen,” said Republican lawmaker Michael McCaul last week.

The Afghan economy relies primarily on international aid. EPA
The Afghan economy relies primarily on international aid. EPA
Afghans know how bad things are about to get

Nine billion dollars is a good carrot. But as the past 20 years of Afghan history, in which ethnic politics has operated like a cancer in Kabul, and the past three years of talks with the Taliban, which manifestly has delivered no concessions on social issues, have shown, vague demands for inclusivity and women’s rights do not make for a good short- or medium-term bargaining position. At most, they are guiding principles against which to measure long-term progress. Unless those who are withholding Afghan state funds can set out measurable definitions for inclusivity and women’s rights, the Taliban will continue to insist that its system is, at least as far as its ideology goes, both inclusive and respectful of women.

But even if a common understanding of the demands could be reached, the Taliban, as things stand, is a government in too much disarray to meet them. That may seem like a good time to negotiate with it, to exploit its desperation, but it is not. The group is so incompetent, so inexperienced and so divided that it lacks the coherence to negotiate back.

One has only to look at the Taliban’s increasingly broken relationship with Turkey and Qatar, two countries that had treated it with the highest degree of good faith, to see that the group is incapable of appeasing even its friends. How can it be expected to appease its enemies?

Even the “stick” element to sanctions is ineffective in Afghanistan right now. It is difficult to sanction a group that, by and large, never had much in the first place. Taliban-run Afghanistan is not Iran, where many leaders live in mansions, have children in foreign schools and squander public funds on foreign misadventures. The Taliban government can be accused of many things, but extreme profligacy is not one of them. Its fighters and even most of its leaders have spent the past 20 years in meagre circumstances. They have little to lose. Without power over a state that functions at at least a basic level, they may never have much to lose.

After a visit to Afghanistan this week, Dominik Stillhart, the ICRC’s operations director, called for “creative ways” to prevent Afghanistan’s total collapse. While he didn’t say what they might be, this is an allusion to a scenario in which money can be funnelled directly to the Afghan people in a way that circumvents Taliban control.

At the smallest scale, this is possible. Cash is already being smuggled into the country and used to feed hundreds of families through community-based initiatives. But at the scale needed to revive and sustain a national economy, to bolster the institutions of state and safeguard them for the future, this strategy is impossible. Only the reignition of the Afghan economy can do the trick.

The country's institutions must be allowed to survive – not for the benefit of the Taliban, but for ordinary Afghans. Most of them are under the age of 30 and have never picked up a gun or made a political speech. They deserve more – after two decades of promises from the international community – than to be stuck in a country left far, far worse off than the one they were born into.

Nine billion dollars or even $19bn will not be enough to give the Taliban the resources it needs to create the extremist dystopia the world wants to prevent. But it will be enough to keep the millions of Afghans who want something better out of life than what the Taliban offers alive for another year. And we cannot forget that, one day, if the Taliban government falls as a result of its continued cruelty and ineptitude, those Afghans will be the ones picking up the pieces.

They need to inherit a country with real institutions, and where half of the people they know are not starving to death. The Taliban doesn’t deserve anyone’s money, but they do.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

The Brutalist

Director: Brady Corbet

Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn

Rating: 3.5/5

Race card

5pm: Maiden (PA) Dh80,000 (Turf) 1,600m
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m
6pm: Arabian Triple Crown Round-1 Listed (PA) Dh230,000 (T) 1,600m
6.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
7pm: Maiden (PA) Dh80,000 (T) 1,200m
7.30pm: Handicap (TB) Dh100,000 (T) 2,400m

GAC GS8 Specs

Engine: 2.0-litre 4cyl turbo

Power: 248hp at 5,200rpm

Torque: 400Nm at 1,750-4,000rpm

Transmission: 8-speed auto

Fuel consumption: 9.1L/100km

On sale: Now

Price: From Dh149,900

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

Singham Again

Director: Rohit Shetty

Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone

Rating: 3/5

Our legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants

Korean Film Festival 2019 line-up

Innocent Witness, June 26 at 7pm

On Your Wedding Day, June 27 at 7pm

The Great Battle, June 27 at 9pm

The Witch: Part 1. The Subversion, June 28 at 4pm

Romang, June 28 at 6pm

Mal Mo E: The Secret Mission, June 28 at 8pm

Underdog, June 29 at 2pm

Nearby Sky, June 29 at 4pm

A Resistance, June 29 at 6pm 

 

MATCH INFO

Uefa Champions League semi-final, first leg

Tottenham 0-1 Ajax, Tuesday

Second leg

Ajax v Tottenham, Wednesday, May 8, 11pm

Game is on BeIN Sports

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Remaining Fixtures

Wednesday: West Indies v Scotland
Thursday: UAE v Zimbabwe
Friday: Afghanistan v Ireland
Sunday: Final

German intelligence warnings
  • 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
  • 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
  • 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250 

Source: Federal Office for the Protection of the Constitution

In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

Profile of Tarabut Gateway

Founder: Abdulla Almoayed

Based: UAE

Founded: 2017

Number of employees: 35

Sector: FinTech

Raised: $13 million

Backers: Berlin-based venture capital company Target Global, Kingsway, CE Ventures, Entrée Capital, Zamil Investment Group, Global Ventures, Almoayed Technologies and Mad’a Investment.

Updated: November 23, 2021, 5:01 PM