Omar Sobhani / Reuters

Najib Ullah Latify, the owner of factory High Standard Pipe explains about their factory in Kabul March 17, 2013. High Standard Pipe employs 850 people and supplies pipes for projects providing clean water all over Afghanistan. Picture taken on March 17, 2013.

KABUL — One of Afghanistan's most surprising success stories lies tucked away on a potholed street notorious for suicide bombings and lined with rusting construction equipment.

The work of the country's top tax collector is more inspiring than the view from his office in Kabul. Taxes and customs raised $1.64 billion last financial year, a 14-fold increase on 10 years ago. That means, now, the government can pay just over half of its recurrent costs such as salaries.

Thanks to tougher enforcement procedures, Afghanistan's tax to GDP ratio today stands above 11 percent - ahead of neighboring Pakistan's dismal 9 percent.

Increasing revenues is vital as donors begin reducing aid ahead of the 2014 drawdown of NATO troops, who have provided the backbone for security since U.S. forces invaded after the September 11 attacks on the United States.

By the end of this year the United States alone will have spent $100 billion on Afghan reconstruction. But future pledges are a fraction of that.

"We are largely dependent on international aid. We would like to be independent," said Abdurrahman Mujahid, the new head of the revenue department. "I would like a sustainable Afghanistan for all the children."

Despite rising revenues, the government will rely heavily on donors for years to come. Taxes, customs and mining revenue will only meet $2.5 billion out of a $7 billion budget this year.

Most of the revenue comes from large corporate taxpayers, who complain their payments have not improved power cuts, potholed roads or security.

Corporations pay a flat tax of 20 percent - the same rate for an individual earning over $2,000 a month.

But unlike developed countries where personal income tax generates a sizeable chunk of revenue, most Afghans scoff at the idea of giving the government some of their meager earnings.

The average annual income, in a country ranked one of the world's poorest, is just $470, according to the World Bank. Those making less than $100 a month don't have to pay tax.

"It's not a good government," said moneychanger Abdurrahman Arif, 28, as he held a wad of soiled notes and scanned for customers. "I don't pay tax. The rich people don't and the government should go to them before they come to me."

Afghanistan has a similar problem to neighboring Pakistan - the very wealthy don't pay their share, and weak institutions often have little way of forcing them.

Authorities admit that taxing the rich isn't easy in a country where the powerful often command militias. But Mujahid promises tax evaders will "be introduced to the law enforcement agencies".

SUBSTANTIAL ACHIEVEMENT

Much of Afghanistan's money is in an undocumented black economy. Corruption is endemic and the country produces 90 percent of the world's opium. Billions of dollars in cash leave the country every year in suitcases.

The security situation is discouraging. Taliban and other militias have made gains in many areas as foreign combat forces wind down their missions.

But some Afghans still manage to make money. Many businesses are fuelled by the aid dollars that have poured into the country over the last decade. Luxury supermarkets, travel agencies and stationery shops crowd the capital's streets.

A U.S. embassy official in Kabul commended Afghanistan's ability to raise tax revenues.

"It's a pretty substantial achievement," the official said, but noted the nation still faced a large funding gap, partly because of its huge security bill.

"It's going to continue being a problem until they can get revenues from the extractive industry, and that's going to take some time," the official said, referring to Afghanistan's rich but undeveloped mineral deposits.

Donors currently pay for just under half Afghanistan's operating costs - mostly government salaries - and more than three-quarters of all development projects like roads, dams and electricity equipment.

Rampant corruption means this money is often stolen, angering donors, fuelling anti-government rage and keeping aid from some of the world's neediest families.

Donors hope that if Afghans foot more of the bill for public services they may become less tolerant of graft from their leaders.

PUGNACIOUS PREDECESSOR

Mujahid, the new head of the revenue department, has large shoes to fill. His predecessor Ahmad Shah Zamanzai oversaw much of the department's growth and didn't shrink from confrontation.

When a vice-president refused to pay tax on income from renting out houses he owned, Zamanzai threatened to leak it to the press. Elections were approaching. The vice president paid up.

Under Zamanzai, the tax department jailed more than 20 tax evaders, froze bank accounts, slapped on travel bans and shuttered the premises of businesses that refused to pay.

In one showdown, he took on the glitzy wedding halls that have mushroomed up in the capital. When the 60 or so venues refused to pay their dues, he had police padlock a dozen of the biggest until the rest fell into line.

Zamanzai was appointed head of the state-run Pashtany Bank as part of a bureaucratic reshuffle this month. His first task, he said, would be to use skills honed in the tax department to extract overdue loan repayments from powerful Afghans.

But the tough tax enforcement has angered some businessmen.

Najib Ullah Latify's spotless factory, full of humming machinery and rows of workers in blue overalls and yellow hard hats, stands a few minutes drive from the tax office. High Standard Pipe employs 850 people and supplies pipes for projects providing clean water all over Afghanistan.

Latify said he'd expand but harassment from the tax man was hurting his business.

In recent years, he says, he's been repeatedly overcharged by the tax office and promised refunds have not been credited. Officials frequently offer to slash his tax bill in return for bribes, he added. When he refuses, he says, officials disrupt his imports and suspend his license.

"I don't know what to do, I have shouted everywhere that they are ruining my business," he said.

"I don't mind paying taxes. Even if 60 percent of it is spent on drinking and shopping and trips for (politicians') wives, maybe 40 percent will go to schools or hospitals. But they must tax me correctly."

The new tax chief, Mujahid, was not familiar with Vitaly's case, but promised to investigate. More than 10 tax collectors - whose basic salaries start at $180 a month - have been fired for corruption in the last two years.

"Corruption is a part of public life in Afghanistan," said Mujahid. "We have the aim to make this department corruption-free."

This year he's planning to finish computerizing tax records, usher through a law on Value Added Tax, and strengthen collection in the provinces - more than 90 percent of government taxes currently come from the capital.

"There's a lot of achievements, but for sure we have problems, and the biggest problem is corruption," he said.

JALALABAD, Afghanistan  - Taliban suicide bombers killed at least five policemen in Afghanistan's restive east on Tuesday, officials said, in a three-hour attack that coincided with a visit to the country by U.S. Secretary of State John Kerry.

The pre-dawn attack on a police compound in Jalalabad, eastern Afghanistan's largest city, came as the country braces for the beginning of the spring fighting season in the 11th year of the war.

One attacker detonated an explosive-laden car at the entrance of the Afghan National Police compound in a bid to let other attackers inside, provincial police chief Amin Sharif said.

"Three suicide bombers triggered their explosive vests and five were shot dead," he told Reuters, adding that five policemen were killed and four wounded.

US shares same goals as Afghan leader Karzai, John Kerry says

Amin said the attackers were armed with rocket-propelled grenades and light machineguns, sparking a three-hour battle with Afghan security forces. Six civilians were wounded.

Kerry was in Kabul to discuss transfer of security to the Afghan forces, as most U.S.-led NATO combat troops prepare to leave by the end of next year.

Rahmat Gul / AP

Afghan police and U.S. forces at the scene where eight suicide bombers attacked a police headquarters in Jalalabad on Tuesday.

Taliban spokesman Zabihullah Mujahid claimed responsibility for the attack in a text message.

KABUL, Afghanistan — Two U.S. service members were killed and at least eight others injured Monday in a possible insider attack at a special forces site in Afghanistan, U.S. and Afghan officials said.

The shooting occurred at a U.S. special operations outpost in Wardak province in eastern Afghanistan, U.S. officials said. The shooter, who was dressed in an Afghan National Security Forces uniform, was shot and killed.

"We have two confirmed dead, but the toll could rise," one U.S. official said. 

A senior official in the Afghan Defense Ministry said that at least three Afghans were also killed.

The Taliban claimed responsibility for the attack in a text message sent by Taliban spokesman Zabihullah Mujahid. The group has falsely claimed responsibility for attacks in the past.

The shooting occurred during a group meeting or briefing, a spokesman for NATO's International Security Assistance Force said.

Monday’s incident marks the first time Americans have been killed by enemy contact in Afghanistan since Jan. 7, according to U.S. officials.

The attack took place as a deadline expired for U.S. special forces to leave Wardak, after Afghan President Hamid Karzai accused them and Afghans working for them of overseeing torture and killings in the area. 

It was not immediately clear if the attack was directed at U.S. special forces. 

U.S. Secretary of Defense Chuck Hagel, who left Afghanistan early on Monday after a three-day visit, raised the sensitive issue of Wardak when he met Karzai. 

Slideshow: Afghanistan: Nation at a crossroads

Rahmat Gul / AP

More than ten years after the beginning of the war, Afghanistan faces external pressure to reform as well as ongoing internal conflicts.

Launch slideshow

U.S. forces have denied involvement in any abuses in Wardak.

Other issues besides Wardak have pointed to a particularly strained relationship between Kabul and Washington of late.

On Sunday, Karzai said in a speech that the U.S. was colluding with the Taliban to keep foreign forces in Afghanistan beyond next year's planned withdrawal, and he went so far as to accuse the two sides of holding daily meetings.

A planned joint press conference with Hagel and Karzai was canceled shortly after Karzai's comments. "Security concerns" were cited as the reason.

The commander of coalition forces, U.S. General Joseph Dunford, and a Taliban spokesman rejected all of Karzai’s assertions unequivocally.

By Sunday night, Dunford was compelled to say the U.S. did "not have a broken relationship” with Karzai or a lack of trust. Hagel told reporters that as a former politician himself he "can understand the kind of pressures national leaders are always under," and that the two countries will be able to move forward together.

Reuters contributed to this report. 

Related: 

Afghanistan following 11 years of US combat: 'Not much different'

Defense Secretary Chuck Hagel in Afghanistan: 'We're still at war'

Karzai, alleging torture, orders US forces out of key province

This story was originally published on Mon Mar 11, 2013 7:22 AM EDT

KABUL — In his opening statement released at the start of his first Afghanistan visit since being named defense secretary, Chuck Hagel reminded everyone, "We are still in a war." By the time his official visit ended, after a planned joint press conference with Afghan President Hamid Karzai was cancelled over "security concerns," it was clear that war’s second front, the war of words, was as volatile as ever.

The press conference cancellation was announced hours after Karzai had gone on national television with another blast of criticism over the U.S. role here. He said the U.S. and the Taliban were "negotiating daily," and working in concert to ensure that coalition combat forces would remain in Afghanistan beyond the scheduled pullout in 2014. Karzai added that two deadly suicide attacks Saturday — one explosion in Kabul that Hagel actually heard from his safe location more than a mile away — were intended by the Taliban to show that U.S. and coalition forces would not be able to withdraw as planned.

"Categorically false," said the commander of coalition forces, U.S. General Joseph Dunford. A Taliban spokesman also rejected all of Karzai’s assertions unequivocally.

By Sunday night, Dunford was compelled to say the U.S. "does not have a broken relationship (with Karzai)," or a lack of trust. And Hagel told reporters that as a former politician himself he "can understand the kind of pressures national leaders are always under," and that the two countries will be able to move forward together.

Still, the dust-up over the busted joint press conference was evidence of the stubborn distance yet to be covered — and that seems in some ways to be widening — between an emerging new Afghanistan and the U.S., its chief protector and stakeholder.

One illustration of that distance — the cancellation on Saturday, even as Hagel began his round of briefings, of the planned handover to Afghan control of the Parwan prison at Bagram Air Base. To the Karzai government the ceremony would be welcome evidence of his administration’s authority and autonomy.  But the ceremony was spiked and delayed at least temporarily when it was learned the U.S. would insist that detainees it considered high risk or high value would not be included in the prisoner releases Karzai has said are essential if reconciliation with the Taliban is to go forward.

Another example of the stubborn distance between the Karzai government and its primary benefactor — Karzai’s order that U.S. and coalition special forces withdraw from the Kabul suburb of Wardak because of unconfirmed allegations of attacks and abusive tactics employed against civilians. Karzai had announced a two-week deadline for compliance with his order; it’s now two weeks later, with no evidence those special forces have retreated as ordered.

And Karzai’s new allegation Sunday that the U.S. and the Taliban are "negotiating daily" — in Doha, Qatar, where the Taliban have set up an office, and elsewhere — was denied by both parties but was a signal too that the Afghan leader feels the endgame might be played out in forums and in discussions in which he won’t be the controlling voice.

Despite unequivocal denials by both the U.S. and a Taliban spokesman that any negotiations are taking place, Karzai did not back off his remarks when he met privately with Hagel after their press conference was called off and replaced by a mere photo op.

"I told him it was not true ... that the U.S. unilaterally is not working with the Taliban to negotiate anything," Hagel later told reporters.

What would Karzai’s goal be in asserting the existence of a back-channel alliance between the U.S. and the Taliban?

"Political," a NATO official said, asking not to be identified. "I mean Karzai has always been a bit paranoid, and he’s got a control reflex that seems more apparent now, as he’s speaking to Afghans and to his legacy … but these comments about the U.S. and the Taliban might end up killing all possibilities for real negotiations. It’s difficult to see where (Karzai) is going."

But though the Karzai/Hagel press conference was scrapped, the two sides did issue final statements of continued solidarity.

"We talked about everything (in our private meeting)," Hagel said, "I told him that he could and should call me directly if there’s anything I can do to facilitate the resolution of any of these issues."

Karzai’s chief spokesman, Aimal Faizi, said that both Hagel and General Dunford had been responsive to President Karzai’s views. "They understand our concerns," Faizi said. "Hagel noted that both sides should learn from their mistakes."

Related:

Karzai accuses U.S. and Taliban of conspiring to keep troops in Afghanistan

Blast rocks Kabul during Hagel visit

US Ambassador: Afghanistan chapter not 'closed' yet

Photo by Daniel Berehulak / Getty Images

Traffic moves through the old city in November, 2012, in Kabul, Afghanistan.

KABUL, Afghanistan —  I wondered, approaching Kabul over the snow-shrouded Hindu Kush mountains, what the story of the moment would be in the teeming city below. 

It had been six years since I’d last visited Afghanistan’s capital, a short visit then that included an interview with President Hamid Karzai as part of the last of six long reporting assignments since 9/11— that one stretching from Paktika and Gardez in the southeast to Herat in the west.

Mike Taibbi / NBC News

A spectacular view over the snow-covered Hindu Kush peaks on the way into Kabul.

More than 11 years had passed since my first Afghan assignment, over the Kyber Pass from Pakistan and then into Jalalabad days after the Taliban had fled;  the arc of America’s longest war.

"Not much different," offered my seatmate, a senior NATO official from one of the 40 countries remaining in the coalition that has alternately steered or suffered through Afghanistan’s bloody march toward stand-alone status as a reconstituted nation.

"You’ll see some new construction under way in the city, but on the surface it’ll be little changed from what you saw before."

Driving to our quarters, I found myself playing an old game: peering at the cars huffing and puffing along the city’s crowded streets, I counted the number of women drivers.  And got the same answer I’d counted on most days, 11 years ago.

Zero.

* * * * *

That so few women drive — cars, bicycles, any conveyance where they are unaccompanied by men — is a relatively small fact of life here but it’s emblematic.  

Afghanistan is still waiting for the changes that will signal that a threshold has been reached, and a fundamental change in the status of women, and in their prospects after the 2014 withdrawal of most coalition combat troops, is one of the changes that matter.

Mike Taibbi / NBC News

Kimberly Motley, an American lawyer, has been living and working in Afghanistan for the past five years as an advocate for abused women.

It’s women who will suffer most after the withdrawal, said Kimberly Motley, an American lawyer living and working in Afghanistan for the past five years as an advocate for abused women. 

"I’ve been surprised that it’s been mostly men now clamoring desperately for a way to leave, when it’s women who will be affected so profoundly," she said.  

With NATO forces gone they’ll have far less protection, she told us, while even under the limited protection that now exists there have been attacks against women so savage as to have commanded headlines worldwide. 

It’s been a consensus in the international community that this poorest and most corrupt of countries may yet be welcomed fully as a sovereign nation, but only when its women are treated with dignity and as equals under law and custom. While serving as secretary of state in 2001, Colin Powell stressed that women's rights were “non-negotiable.”

* * * * * 

As for negotiations for peace and reconciliation with the Taliban, they are, for all practical purposes, non-existent.  A handful of self-described representatives of Taliban leadership have set up office space in Doha, Qatar, and overtures have been made with the goal of starting substantive talks.

"But here’s the problem," a highly placed Western diplomat told me, asking that he not be identified. "Karzai only wants face-to-face discussions with the Taliban, at the negotiating table — and not with interlocutors who may or may not represent Mullah Mohammed Omar and the true Taliban leadership.  He’s not interested in discussing theoretical possibilities, if nothing of consequence is going to happen."

The Taliban, meanwhile, seem uninterested in discussing any possibilities short of a return to complete power in Afghanistan. 

Said Maulvi Shahabuddin Dilawar, one of the Taliban's "negotiators" in Doha, there will be a "snowball effect" after the 2014 withdrawal, the Taliban waiting patiently to make their move. 

"Anything short of a total victory,” he said, “is unacceptable." There’s a saying here, attributed to the Taliban: "They have the weapons; we have the time."

Still, the Western diplomat said, "We’ve opened a door in Doha, and hopefully there will be an answer and real negotiations might begin."

I reminded him of the timeworn political cliché, "Hope is not a strategy."

He smiled. "Well, it’s more than mere hope," he said.

The diplomat talked about advances on the periphery of the central questions about peace talks and post-2014 security: an imminent new mining law that will encourage foreign investors to ante in for a stake in the trillion dollars in copper, iron, gold and oil reserves within reach beneath this country’s battered landscape;  advances despite notable setbacks in the training and readiness of Afghanistan’s army and national police forces; real improvements in the prospects for some women — in medicine, law and even the armed services.  

"It’s not just hope," the diplomat repeated.

* * * * * 

An old friend named Shirzad came by to visit on Saturday.  He had worked for NBC News in the past and asked that we not use his family name for security reasons.  

We talked about the days and months just after 9/11, when we first met, when in his home city of Jalalabad the Taliban had suddenly fled under the punishment of American bombing raids, and the eventual insertion of American special forces chasing Bin Laden and his surrogates through the mountains and caves of Tora Bora. 

There were so many signs of optimism then: little girls lining up giddily to go to school, some women braving the markets having shed their burqas, talk among the men about a new future when none had seemed possible for so many years.

Slideshow: Afghanistan: Nation at a crossroads

Rahmat Gul / AP

More than ten years after the beginning of the war, Afghanistan faces external pressure to reform as well as ongoing internal conflicts.

Launch slideshow

But that future had not arrived, Shirzad said. The Taliban were a "shadow government" in so many villages and neighborhoods, in control by implication and threat, just waiting.

"My family, and many of those I work with, we have been threatened with death." So he’s leaving, he says, having spent months negotiating a labyrinth of paperwork to gain approval to take his family of nine to the U.S. and take his chances there if he can. 

His brother, with his family of eight, is trying for the same option. "It is the only way for me," he told me. "The local police, they will not protect us when NATO soldiers are gone — many are Taliban or support them."

He offered a sad smile: "No more for me, in Afghanistan."

What there is, he said, is corruption and danger in every direction.  Away from Kabul there were still drug lords ruling over fiefdoms fueled by flourishing poppy fields. Even in Kabul, he said, travel can be treacherous, trust unwise.

And attorney Motley has more clients than she can handle.

And 30 local police died in a two-day period last week in three suicide attacks for which the Taliban claimed credit.

And President Karzai complains about not getting enough American weapons and support, while at the same time ordering that American and NATO forces withdraw from a Kabul suburb because of unconfirmed rumors of harassment and attacks against civilians.

And in my third trip through the streets of a city I hadn’t seen in years, I looked again for any women drivers.

And couldn't find a single one. Again.

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KABUL — A coordinated attack involving at least three suicide bombers and a powerful car bomb took aim at the headquarters of the Kabul traffic department on Monday, followed by a clash between at least one insurgent and security forces, police said.

The attack took place just days after six suicide bombers attacked the Afghan spy agency in Kabul, killing two.

The Taliban claimed responsibility for Monday's attack.

"Today at 5 o'clock in the morning (8:30 p.m. EST Sunday) a number of mujahideen martyrs entered a government building close to an American training centre... Heavy fighting is ongoing," spokesman Zabihullah Mujahid said in a text message to media.

Police said it was not immediately clear if there were any casualties in the attack, which involved a second bombing, a tactic favored by Islamist insurgents elsewhere but relatively rare in Afghanistan.

"About an hour after the initial attack (triple suicide bomb attack) a fourth man drove a car to the same compound and detonated another bomb," the head of the Kabul police criminal investigation department, Mohammad Zahir, told Reuters.

Violence across the country has been increasing over the last year, sparking concern over how the 350,000-strong Afghan security forces will be able to manage once foreign troops withdraw by 2014.