Afghan Govt Struggles to Tax US War Contractors

Pentagon Told Contractors to 'Just Ignore the Bills'

The Afghan government is threatening to begin arresting US military contractors and confiscating their goods if they continue to refuse to pay long-overdue tax bills, officials are confirming tonight.

The effort has enraged contractors, who insist that they have tax-exempt status by virtue of working with the US-led occupation forces, and both Pentagon and State Department officials have been advising them to “just ignore” the tax bills they receive.

Afghan Finance Minister Omar Zakhilwal insists only direct contractors are exempt, however and that any company not explicitly exempted is treated as non-exempt, and that the moves show the country is serious about moving against tax evasion.

The resistence from US officials has also sparked annoyance from Finance Ministry officials, who say that the US Treasury Department has been pressing them to move against evasion within their legal system and now the US is demanding that they ignore them to benefit the contractors.

Officials also noted that on some occassions they have been turned away at gunpoint by contractors when asking to see their books and, in some cases, Finance Ministry inspectors have been beaten by the contractors.

Author: Jason Ditz

Jason Ditz is Senior Editor for He has 20 years of experience in foreign policy research and his work has appeared in The American Conservative, Responsible Statecraft, Forbes, Toronto Star, Minneapolis Star-Tribune, Providence Journal, Washington Times, and the Detroit Free Press.