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Government
strategy
Program
4: Strengthening the Investment Climate
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Government’s Five-year Strategic Benchmark
All legislation,
regulations and procedures related to
investment will be simplified and harmonized
by Jaddi 1385 (end-2006) and implemented by
Jaddi 1386 (end-2007). New business
organization laws will be tabled in the
National Assembly by Jaddi 1385 (end-2006).
The Government’s strategy for investment of
State-Owned Enterprises will be implemented
by Jaddi 1388 (end-2009) |
While
improving access to key productive factors, in
particular land, skilled labor and finance, the
Government will also pursue specific policies aimed
at improving the investment climate. As outlined
earlier in this Chapter, prioritization in
infrastructure investments for energy, roads,
airports and border facilities will take into
consideration the needs of the private sector. As
lack of energy is one of the main bottlenecks cited
by the business community, the Government will
particularly seek to accelerate investments and
project implementation in this area. Strategies for
human capital development (also earlier in this
chapter), in particular the education and vocational
training strategies, should be closely aligned to
ensure that skills and education match the
requirements of the market economy. Labor policies
will also need to be supportive of private sector
concerns. The Government will continue its efforts
to strengthen the judicial sector (as discussed in
Chapter 7) improve the commercial courts system,
property rights and enforcement mechanisms. The
Government is also committed to making the
regulatory system predictable, transparent and
simple.
The full ANDS will look into strategies of how to
improve conditions for certain key industries.
Currently many potential investment opportunities
remain untapped. These include import substituting
activities, traditional exports, construction
related activities or infrastructure, utilities and
trade related services.102
We aim to create competitive advantages for the
private sector to operate in the formal economy. The
Government will work to ensure businesses move from
paying illicit “taxes” (bribes) towards legitimate
taxes that enhance domestic revenue generation and
facilitate business growth. To that end, the
Government is seeking to issue income tax
regulations, eliminate nuisance taxes, reform the
business receipts tax system, reform tax
administration, and eventually enter into bilateral
tax treaties with its significant trading partners.
The Government is committed to improving the legal
and regulatory environment, with a particular focus
on enforcement, and to strengthen implementation
mechanisms in order to lower transaction costs for
businesses, and to improve the climate for Foreign
Direct Investment (FDI). Government will also divest
itself gradually from State Owned Enterprises.
Quality control will be developed to improve the
competitiveness of Afghan products. The Government
will take steps to encourage domestic and foreign
investment. The development of business development
services will be facilitated and the transparent
information flow improved. Government will also
assist the private sector through infrastructure
improvements, in particular through addressing land
titling issues and the establishment of industrial
estates.
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