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Taxing the war effort

Though there is an agreement between the two countries exempting military supplies, the Defense Department’s shipments are still getting taxed, the inspector general found.

“The Afghan government is charging DOD commercial carriers customs process fees for every exempt container of goods shipped into Afghanistan in support of U.S. military operations,” the report noted.

Inspector General John Sopko’s office is urging Congress to step in, contending that the fees are starting to hurt the U.S. war effort. The Karzai government has stopped a number of trucks laden with food or fuel for U.S. military personnel and their allies, demanding that transit fees be paid before the trucks are released.

“This is an issue U.S. military leadership in Afghanistan is currently addressing with the Afghan government,” said Cmdr. Bill Speaks, a Pentagon spokesman who handles Afghanistan affairs. “We are confident the situation will be resolved soon.”

State and Defense Department officials have attempted to negotiate with Kabul, but investigators said the imposition of fees is supported by Mr. Karzai himself.

Meanwhile, U.S. contractors are starting to charge the taxes and levies back to the U.S. government, increasing the costs of procurement.

Earlier this year, the Afghan government stopped the transportation of 220 containers, some of which contained food for U.S. and allied troops. The contractor charges the U.S. government $100 per day per container for their use, so every day the containers are held by Afghanistan customs, the contractors is charging the U.S. government $22,000, the IG noted.

Much of the controversy surrounds a customs declaration form known as T1, with the Afghan government charging late fees for forms that aren’t turned in on time. But the U.S. Transportation Command — in charge of logistics for the military — maintains there’s an agreement with Kabul that exempts military supplies and told its contractors not to pay the fees.

That hasn’t stopped Afghanistan from levying the fees or, according to SIGAR, making it more difficult for contractors to pay their bills on time.

Afghan customs houses have stopped accepting copies of forms and started demanding the originals. The government normally gives a 21-day grace period to turn in T1 forms before assigning late fees, but customs officials have started the 21-day countdown as soon as they receive notification of the cargo — before its even crosses the border into Afghanistan.

“These changes have led personnel to fly to customs houses to hand-deliver original documents and avoid further fines,” SIGAR said.