Quarterly Progress Report: Afghanistan Public Financial Management Project

The project's two objectives are to strengthen the government's capacity to forecast, increase, and manage domestic revenue, and to strengthen budgeting and reporting capacities at the national and sub-national level. Component 1, Domestic Revenue Mobilization and Management, focuses on analyzing proposed revenue-enhancing measures to augment and improve Afghan tax policy. Technical assistance is provided to the Taxpayer Offices in the Revenue Department to increase their capacity for auditing, accounting, enforcing, and managing the Afghan tax apparatus. Support is also provided to the Non-Tax Revenue directorate to streamline their efforts to increase government revenue through establishing vehicle registration fees, traffic fines, driver's license registration fees, and state-owned enterprises. Component 2, Budget Planning and Execution, supports disciplined and realistic budgeting required for improved fiscal sustainability in Afghanistan. Technical assistance is provided to government officials to ensure a smooth transition from off-budget governing to on-budget governing. The project also supports improved execution of the budget development process and increases the development of public financial management skills of civil servants. Component 3, Cross Cutting Requirements, incorporates innovative approaches such as public-private partnerships, mobile solutions, and new technology to reduce reliance on donor-funded advisors. The project utilizes local systems and assists in building those systems if they are inadequate. It also supports the establishment of information exchange groups to disseminate best practices on issues affecting multiple ministries and government entities. Technical assistance for all three APFM components concluded on September 30, 2017, which was the end of APFM's year two reporting period. All APFM technical advisors concluded their contracts on or before September 30, 2017. As a result, no technical activities were implemented in the last quarter. APFM engaged in a successful closeout period, receiving the approved final report from USAID with no comments. The Afghanistan Trade and Revenue (ATAR) Project provides technical support and assistance aimed at strengthening the business climate of Afghanistan to enable private investment, enhanced trade, job creation, and fiscal sustainability. Project interventions aim to improve the capacity of the Government of the Islamic Republic of Afghanistan (GIRoA) to formulate and implement a liberal policy framework for trade and investment in accordance with international standards. Support for trade policy liberalization involves building the necessary capacity within implementing institutions to conduct negotiations, draft legislation, and institute reforms required to improve the trade regime within the region and otherwise meet World Trade Organization (WTO) requirements. The project also facilitates enhanced access to regional markets through the adoption of cross-border transit agreements, enhancing corridor governance, reforming customs clearance procedures, and improving regional government and private-sector linkages. Improved customs involve building GIRoA's capacity to generate revenue through customs revenue mechanisms and assisting in strengthening the capacity of the Afghan Customs Department (ACD). In its final months, ATAR refocused its programmatic efforts on export-led growth activities, including expanding commodity air cargo shipments of Afghan products by finding and utilizing a freight-forwarding mechanism, establishing and implementing a freight-forwarding mechanism, and establishing and implementing a customs clearance process.