KABUL, Afghanistan, Jan. 17 (UPI) -- Afghanistan risks another clash with the United States by trying to tax American contractors, officials say.
U.S. law and bilateral agreements forbid taxation of U.S. government assistance, but the wording is vague, and the governments differ on what "tax-exempt" means, The Washington Post reports.
Contractors who have received tax bills for work done under government programs say they have been told by the Defense and State departments just to ignore the bills and "stand up for our rights," said one executive of a company with U.S defense contracts in Afghanistan.
The Afghan government has begun sending out what it says are overdue tax bills and has threatened some U.S. companies with arrests, loss of licenses and confiscation of aid goods.
Afghan Finance Minister Omar Zakhilwal said Afghanistan is "serious against tax evasion."
"Whatever is not exempted by law and treaties will not be exempted," he said.
The U.S.-led coalition spends up to $10 billion a year on private contractors in Afghanistan, more than five times the total revenue the Afghan government expects this fiscal year.
