Islamic Republic of Afghanistan: Second Review Under the Three-Year Arrangement Under the Poverty Reduction and Growth Facility: Staff Report; Press Release on the Executive Board Discussion; and Statement by the Executive Director for the Islamic Re

This paper discusses the Islamic Republic of Afghanistan’s Second Review Under the Poverty Reduction and Growth Facility. Political pressures on tax administration and the granting of concessions to some manufacturers through increased protection on final goods and lower duty rates on raw materials pose risks to achieving the revenue targets, and are distorting the customs regime. The external current account is projected to improve, and official reserves would remain at about five months of prospective imports.