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Electronic duty payments replace risky cash deliveries in Afghanistan

in Afghan Business

Electronic duty payments replace risky cash deliveries in Afghanistan

Imports of expensive, high-tech equipment and large boxes of pre-paid phone cards by Afghanistan’s five major telecommunications companies account for half of all customs duties collected at Hamid Karzai International Airport in Kabul. Until recently, paying duties on those imports presented a huge security risk.

Major telecommunications companies such as the Afghan Wireless Communication Co., Roshan and MTN previously paid their customs duties with hefty amounts of cash. The companies hired armed guards to protect armored vehicles filled with plastic bags bulging with Afghan currency. The vehicles drove to the customs site and the bags were hauled into an office so officials could count the bills.

In May 2015, the Afghanistan Customs Department and Da Afghanistan Bank, with support from USAID’s Afghanistan Trade and Revenue project, launched an electronic payment, or E-Pay, system for customs duties on all imports. The system began in Kabul and will roll out to customs sites nationwide. It has transformed the payment of duties from a high-risk logistical challenge to a simple electronic transaction.

“The new system is good for us because it’s secure. The money goes from one bank to another bank,” said Sayed Hasib, senior logistics officer at Afghan Wireless Communication. “It was very difficult to transport money due to security. Transferring from one bank to another is safe.”

With E-Pay, an importer can pay customs duties electronically through any commercial bank. Following electronic notification of a trader’s payment from a commercial bank, the Da Afghanistan Bank branch at each customs office issues a payment confirmation for each transaction and submits it to the customs office. Customs then issues an order to release the goods.

“This is a good initiative for customs to facilitate trade,” said Adnan Sahil, MTN’s customs clearance manager. “We are happy that we don’t have to take a lot of money in cash. Payments in cash take a lot of time, and we could use that time for investment.”

The Afghanistan Trade and Revenue project is designed to support Afghanistan’s entry into the World Trade Organization, increase the country’s international trade, and improve the government’s ability to generate revenue to replace donor assistance. The project runs from November 2013 to November 2018.

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