Ministry of finance

Pashtoonistan watt,
Kabul, Afghanistan

Mr.attaur Rahman
Internship advisor

Mohammad Khalid Najib

FA16-BBA-401
Jun 13, 2019
 Contents
Introduction________________________________________________
History of the ministry of finance_______________________________
Responsibilities______________________________________________
Organization________________________________________________
 Introduction
 Mission statement
 Vision statement
 Core values
 goals

Introduction of different departments___________________________

 Deputy minister office
 Revenue general department
 Treasury general department
 Budget general department
Business orientation__________________________________________
A- Organizational structure
B- SWOT analysis
C- Marketing strategy
D- Competitive strategy
Learning as a student intern___________________________________
 A- Duties
B- Accomplishment
C- New knowledge acquired
D- Problems encountered
E- How experience impact your career
Recommendation__________________________________________
Conclusion_________________________________________________
Reference__________________________________________________

Executive summary
This report is all about my internship period at ministry of finance of Afghanistan. The period of
the internship was 6 weeks in which I was assigned to apply all of my knowledge which I
learned in my practical business field and within the class. So the first chapter is including all the
relevant information about the ministry of finance. And the sources of information are the facts
that are gathered from the ministry and my personal experience.

Doing internship is an opportunity for the students to excel the learned skills and knowledge in
the practical world, it also gives a chance to apply their knowledge and tackle down all the
problems it real world on their own.

This report gives you full and comprehensive detailed analysis of the ministry of finance of
Afghanistan, and many of its operations are evaluated in addition overall analysis are discussed
in details also suggestion and recommendations are given for better improvement and
conclusion is given as a summary of the report. So I mainly worked during my internship period
in the following departments:
Budget department, revenue department, and treasury department, These departments along
with other operational departments are discussed and their working procedure, policies, and
operations are described in full details.

List of Abbreviation
BBA Bachelor’s in business administration
MOFA ministry of finance Afghanistan
HR human resource
FAD finance and accounting department
DVB document of value bank
TO treasury office
CBA central bank account
AFMIS Afghanistan financial management information system
BK Book keeping
BO budget office
SO Salaries office
MTPO Medium taxpayer’s office
SSO supply service office
DO diplomatic office
ARD Afghanistan revenue department
CRD Custom revenue department

SIGTAS standard integrated government tax administration system

NTR Non-tax revenue
INTRODUCTION:
History of MOF:
In Afghanistan for the first time taxes were given importance in the role of Ahmad shah baba
who was the president of Afghanistan. At that time, in the year 1140 several governmental
offices were determined in which the ministry of finance was included and its name at first was
(Humayon alla).

The first incumbent of the ministry was Abdullah Khan Popalzai whose name at that time was
Dewan Begi then it was famous by Mustafawi Almalik who was hired and selected. Till now the
authority is the same as he had at that time.

Mustafawi Almalik worked hard for the ministry and enhanced the financial system of the
ministry and was responsible for the entire accounting and financial problems.

In the start of the year 1000 to 1200 taxes were collected in the form of physical goods also in
this method the salaries of the government employees were asked to be paid by the owner of
the land and the employees were assigned to go and get the salaries from the land owner in
relation to the order which is given in terms of the payment. So till the kingdom of Habibullah
khan the taxes system was not identified, then in the year 1298 solar in the role of Zaman Ullah
khan the physical goods system was changed and enhanced to direct tax money payment and
then the ministry of finance came into existence and the financial system was established in the
year 1965 solar and was introduced with many different types of financial systems within
Afghanistan.

Responsibilities:
As we know Afghanistan is a developing country, and currently political situation is also not
stable, so international donors are financially supporting the governmental budget, as the MOF
is responsible for the public finance and budget expenditures throughout the country. The
government encourages foreign donors to provide direct budget for helping to stabilize the
position and creditability of the MOF. According to the national development strategy the
target sector of 2011 were education sector, security sector, and the governance sector. Its goal
is to reduce the level of poverty, increase economic growth and improve the level of security
and governance. In 2012 the allocation of budget was as follow:

 For security sector it was 18838 million AFS

 Education sector 5.533 million AFS
 Governance sector 2531 AFS

Total budget for 2011 fiscal year was 74 billion AFS, which is equal to 1.4 billion dollars, it
increased to 101.2 billion Afghani, equal to 1.9 billion USD in 2012 but throughout the year it
reached to 14.2 billion which increased about 49.5 percent.

So the ministry of finance now tries to frame the financial system and financial activities with
international standards, rules and regulations. To achieve these goals, the ministry of finance
created some new units which are staff enrollment unit, policy design, and budget execution.
The main target of ministry of finance is to control financial affairs of the country in order to
have economic growth and be an economically strong country and to insure that the public
wealth has improved.

Organization:
Introduction:

MOF is assigned for the implementation and accomplishment of the budget, collection of taxes
and control of public expenditure in Afghanistan, so it controls management of the custom
affairs and provides a quarterly report to announce the advancement in Afghanistan’s financial
sector. Every country’s government has to know about their revenues and expenses to allocate
the financial resources effectively. The major part of the afghan budget is financed by the
international assistance, as the ministry of finance is the responsible body for the public finance
and expenses which is increasing step by step it’s influence on cadence and management of
international financial assistance to Afghanistan and encouraging international donors to
channel more funds to the government treasury. From the past few years the ministry of
finance has been trying to frame the financial system and financial activities with international
standards, rules and regulations. To achieve these goals, the ministry of finance created some
new units that are staff enrollment unit, policy design, and budget execution. The main targets
of the ministry of finance are to control financial affairs of the country in order to have
economically strong country and to insure that the public wealth is improved and to manage
the financial affairs of Afghanistan through scientific economic programs, so that Afghanistan
becomes economically sustainable, secure and self-sufficient these are to ensure that public
wealth is used in an accountable and transparent manner.

Vision statement:
A stable, financially assured and financially self-sufficient Afghanistan with a fiscally disciplined
government and a ministry that is accountable and responsiveness to the needs of its clients.

Mission statement:
As the ministry of finance is the main reason for the financial reform of the country so the
ministry of finance is working with the central bank of Afghanistan to be ensure that the
country’s economy is going properly and met the international standard for possession.

Goals
 Manage government revenue
 Reduce poverty
 Promote the economic growth
 Public wealth sector
 Education sector
 Security sector
 Better infrastructure
 New polices

Core values:
The ministry of finance vision & goals are based on core values that
ministry of finance staff must aspire to:
1. Integrity

2. Loyalty to Afghanistan’s constitutions and respect to law

3. Impartiality

4. Service, result orientated & team work culture

5. Fair and courteous treatment of the general public and private sectors

6. Effort in works and following of excellence

Introduction of different departments:

Business orientation:

_organizational structure:
 Ministry of Finance

Chief of
Internal Audit
Staff/Ministers

gender budgeting
unit

procurement policy
Fiscal Policy Unit
ubit

state owned
enterprises unint

deputy minister deputy minister deputy minister deputy minister

finance customs & revenue administration policy

budget general revenue general customs general reform implements admine general
strategy directorate
directorate directorate directorate management unit directorate

treasury general provincial customs policy general

directorate department directorate
_SWOT analysis:
Strength:
 Has a great relation with international donors
 Has skilled employees in every department of the MOF
 Has mostofyat in 34 provinces of the country
 Has a unique leadership commitment with a clear vision statement
 Active and continuous internal reformation
 Political support to reform the MOF

WEAKNESS:
 Lack of the training program for new commerce
 Bad political situation in country
 Lack of skilled human resources
 Lack of communication with stakeholders
 High level of corruption inside mof
 Lack of management
 Employees absenteeism

Opportunity:
 Public demand for reformation
 Donors investment in infrastructure part of the country
 Government and international support for the reform
 As in Afghanistan the education level is in improvement level so they will get skilled
employees in future
 Good relation with neighbors can be the cause of improvement in budget level

Threats:
 Smuggling activities
 Low quality imports from foreign countries
 Political instability
 Potential change in leadership will affect the reformation activities
 Discrimination with female workers
 Lack of regular coming of the employees because of bad political situation
Competitive strategy:
It don’t have any competitive strategy because it is a governmental organization. But it has a
strategy against other governmental organization which is all about to focus on their own
activities to generate more revenue than other ministries as the ministry of finance was the
first rink in 2018 which were generated the highest revenue in the country.

Marketing strategy:
Ministry of finance don’t have marketing strategy because it doesn’t sell any of the product to
market for.

Learning as an interne:
Duties:
Introduction: during internship I was assigned to visit two to three different offices during the
day. So when I went there then every head of the office were describing their daily work and
responsibilities then we I understand their responsibilities then I was working with the workers
to know the process of their daily work.

As I mentioned before I visited four departments and they had different branches. During my
internship I visited different office like paying salaries office, book keeping, treasury office and
special distribution unit, treasury department which have allotments and commitment unit,
medium taxpayer office (MTO), large taxpayer office (LTO), small taxpayer office (STO).
Afghanistan revenue department and customs revenue department under the supervision of
well-trained management. So, following are the duties which I have performed during my
internship.

Payment office:
This office had two parts one was ordinary and the second one is explorer. Ordinary offices was
based on daily works like daily expenses of the government agencies and monthly salaries of the
staff. And the other one is the explorer it means that work which are related with government
undergirds, it means that in first step government invest on it and after that government are
collecting that’s money which are receiving from undergirds and they are also managing them.
So however this office was like a department many staff were working there so we had to work
here for more than one day because we cannot get all information in one day so we have to go
for two days or more.so far we went throw many staff chair taking different notes and different
information, so I would like to share it step by step. The job of this office was issuing the cheque
it means they are delivering cheques to those employees whom are working for the
governmental purposes, so in my ahead sentences as I said that they actually perfuming the
cheque, thus this cheque has three steps.
The very first step was reception. actually this office receive cheque from externally and they
keep it with the AFMIS (Afghanistan financial management information system) at this system
they have all information about the person who has the cheque and the system have all the
information of that individual in both form hard form and soft form and for hard form they have
the place which all of the information was on different files. And the last one that all of cheque
was keeping and saving them with this advanced system.

Document of value bank:

The head of the department told me that in this office seventeen person are working and the
other thing he told me that the price is ten Afghani per sheet.
So, coming to the next part the head of department said that we totally have different process
from another nation we have a very update system. The document of value bank job is the
procure and the distribution sheets or form to all nation and from here we stump it and distribute
it in whole provinces. The sheet or receipts all the governmental employees have from here they
give the example of traffic whenever the traffic police fine a person the money come here, the
process they told us is how money we get is like this .he said that if we give hundreds receipts to
the traffic then at the end of month they give us the hundreds receipts money. Here of student
ask a question that can the traffic police steel the money if yes than how in which ways the
answer is very sample, said that now a days everywhere is corruption so it is not a hard task for
them to steel the money simply they make a photo copy from the same receipts and fine the
public.
They told me the very two basic advantages of the document of value bank is clean environment
and the public will be aware of law of the government. Another example is that if a person do
peep in a place where a government prohibited that like near to hospitals, university and some
government place so they fine it and the money come to this department so one advantages is
that public will well aware from the others cares they will not disturb others. The other very
important point that I noted was for example a person who perform all formalities of passport
process and paid money too so in this case the individuals do not have the right to re back the
money the money will not be return but they said the only case in which money can be back that
case is if a person perform all the formalities to take the passports and also paid the money but
he/she died in the middle so he/she has rights to get back the money from government but this
have a long process and will take more time also. The last things they share with us is like every
car in the country have no plate, so whenever a civil apply for no plate for car exactly they will
pay so that pay controls and manage from this department.

Treasury department:
This treasury office job is that whenever some financial problem occur in a province so this
treasury office has the responsibility to solve problem for them. They actually get the information
about the problem throw email or telephone because to have easy and fast access. Another
problem that this treasury office solve is that how much we do have saving and how much we
have expense per day at every governmental institute, they solve the problem in all provinces
even they have coordination at every province. The other salaries problem has been solving from
here at all province. They give us an example that ministry of energy and water had a problem at
one province that we need money for this development. so, this treasury office first email to the
bank of Afghanistan then if the bank says yes, we do have the budgets so after that they send
email to the coordination in the province and then the coordination do further processes of it.
Central coordination of the province start working on it.
After that in this treasury office the one-line manager shared his experience and described the
office in detail. The manager said in this office total we do have six staff. Two of them are head
of office two are line managers and three are staff. The manager said that the job of this treasury
office is that control all the ministry of finance, the office have right to take decision and have
responsibility to solve the problem overall .another things they said that only this office have
right to use the red pen overall in the ministry office no other office have right to write with red
pen, all other offices have to use blue or black pen. This office job is also checking the employees
time when to enter to ministry and when to off and they said we start from 8 to 4 o’clock and
check the employee time, if some employee come late we ask him or if some employee do
absentees we arrange a meeting and asking them, what is your problem why you do absentees.
We try to solve external and internal problems. The other very important thing is that this office
make a plan that how to solve the employees problems but only the senior manager of ministry
of finance will take the decision and our task is to control the plan and decision that has taken by
manager and if there is need of promotion, bonus further training also the responsibility of this
office. The other very important things is that this treasury office make a plan that what we will
do in one year, which steps we have to follow? What is our strength? and weakness, so we all
have these on eye and make plan for that, when ever in county if some world bank problem occur
so this treasury office has responsibility to solve it.

Book keeping office:

This office has two main step which is the procurement and technology, this both words mean
that how budget has cycle from one office to other from one department to other and from one
ministry to another ministry with different code of the ministry.
This booking keeping has five branches which has discussed below:
1. QATAYA
2. THE REST
3. ALLOCATION OF SPECIFIC AMOUNT
4. FILING
5. EXPLORE
The step of the book keeping is qataya which they told me that this has very long process so we
will discuss it next day the other four will explain it today. So coming to the rest (bakayat) actually
this mean whenever the ministry of finance give a project to a person that have the responsibility
to note it with themself that how much money has been invested? How much further should be
invested? in the coming month, every expense they have to write and have to note with their self
so after if the project complete or still in processing so that they need further money or done
with project so they have to bring the total note to the ministry of finance then they decide. It
has a special form which code is (91) have qataya and after they have (bakayat) the rest they take
decision to process it further. The next one is allocation. Specific amount of money for project,
actually in this branch they check the remittance in bank that is the specific amount existed or
not? If existed then further process will be continuing with the form which is code is (16) which
they are in the budget. If there is not remittance so they send email to ministry then they process
it again. Coming to the next which is filing, actually this is the hard form of their data, when all
these five branches of book keeping of a project has been completed, so they create a file for it
in a hard form where they have proven that on that year we are done from with these projects.
For every month they have different file and for whole they have different files so whenever a
year is completed so they check all the files of a year and make a note and send to parliament for
prove that this projects on this month of this year has been completed. So they have record of
all governmental projects that they have assigned to be done within a year. The last one of this
book keeping is the explore which has two steps one is ordinary and other one explore, so the
ordinary is like in the ministry of finance they have the expenses of monthly salaries, transport
for the staff and the transporting and providing car for different managers and CEOs, it Means
that all small expenses come in the ordinary development and the other is explore that
government has different strategies for development of the infrastructure, I mean making road,
university, hospitals, electricity and many other big project.
Budget office:
However, finance and account have two branch which is budget and other is account. The
account has three branches which are bookkeeping, remittance, and monthly salaries. These are
the process of budget which I did today, so today I learnt about how budget is processing in the
ministry of finance. So, budgets have two step one is ordinary and other is remittance, today we
discussed only the remittance of budgets. So remittance has three form on which the budget is
processing.
1. PO (purchase order)
2. CF (commitment form)
3. PCS (project code system)

1. PO form is that form in which the budget is processing in two ways, the first one is that when
the donor give money for the project so the ministry of finance have the full authority of money.
They said whenever the ministry of finance give budget for the project so the ministry can take
decision, make a plan to implement that so it means that the ministry have right to take action
and PO is that form which the budget should be more than 500000 Afghani, the project cost
should be more than 500000 money, if not it is not a PO project.
However, they shared me the form of PO then I wrote some points of it. On the first corner of
the form the amount of project should be written, after that the budget for the project and after
that the plurality of the budgets and the total budgets. And after that how much should be paid
in advance and how much interest should be settled. After that acceptance the budgets and
taking from the bank.in the form there should be all information about the company to whom
the budget for a project is provided. At the below side of form there should be signs of the CEO
ministry of finance, controller of the budgets, the head of the management, the head of the
payment sector and the head of the bank and cash.
2. CF form is that form in which budget is less than 500000 Afghani. At this form they actually
performing the monthly salaries for the governmental employees. And the other things is that it
is same like PO form but the different is that in PO form we have project more than 500000
Afghani but in CF form we will have less amount than 500000 Afghani.
3. PSC form is that form in which the budget is giving in the shape of installment method. The
very important thing in this form is the starting date and finish date will be clearly mentioned, in
the form of PSC, however ministry of finance use it for both PO and PSC form.
Remittance:
 At the first stage they send an application then they pass it to the accounting and
finance department.
 In this step they give the price of the product which they have bought for the office.
 They make comparative table making.
 Making of M2 and M3 forms, actually these are purchasing forms.
 Making of M7 FORM for adding good and stock
 Bills of the company.

Providing monthly salaries to the government employees:

In this office I worked around four days. So the things which we discussed and which I learned
are mentioned below. There we discussed different ways that how the government employees
get monthly salaries at the country in overall 34 provinces. So I visited this office for only three
days, there we discussed that how the employee get their monthly salaries, promotion, bonus,
reward, pension, appreciation letter and acclamation letter.
So here how the government employee get promotion, so they said it is related to skills,
experience that how the employees adopt it. Totally the government has 1 to 9 seats, so every
employee will get promotion at 3 years of jobs. For example, I am working at 9 seats for the
government so to get promotion to the 8 seats, it will take 3 years so total will take 27 years’
experience of work to becoming or to take number 1 seat of the job. At the year of 2015 every
government employee had 16000 monthly salaries, however only those employees which have
the bachelor degree after at the year of 2016 all employee which are the bachelor has increased
their salaries with 2000 Afghani more to become 18000 Afghani, however the holder of master
degree has increased to 4000 Afghani and the PHD holder has increased by 6000 Afghani. The
other important things they share with me like from educated person we don’t minus their
salaries if they make absent from opposite of it all those employees which are not educated if
they make absentees will be deducted from their salaries according to their absentees.
For all the government employee whom are getting the pension is only 8% from their monthly
salaries, these pension systems are for all like they said CEO of the ministry others different
manager and employee all have the same 8% pension system.
The others information they shared with me like for all the government employee we do have
the 50 days of vocation in 1 year. This 50 day is divided into 3 steps.
1. First 20 days of vocations are for the enjoyment for the employees.
2. Second 20 days of vocations are for like employees get ill, sick or other disease.
3. Last 10 days of the vocations are for employee’s importance.
In case for the married women we have different policy actually they give three months of
vocation, one month before the delivery and two months after the delivery and for monthly
salaries they have the same policy they will give their monthly salaries but not the transport and
lunch money. At another case if the baby is not normal the government give extra 15 days but
will have solid document to prove that 15 extra days. Another policy that the government has for
applying to HAJ is that they give 40 days at once at all life.
The last things that the government give only 30 Afghani for the lunch for every employee even
the CEO, manager and employee.

After that we discussed the cycle for the monthly salaries to government employee. We discuss
when, why, how, where government give the appreciation letter, bonuses or reward, pity
pension and the acclamation letter.
1. Appreciation letter means who work for the benefit of the government. The method of this
appreciation letter is divided into three grades like in one month 30 days rewarded salaries is
come in third grade appreciation letter. The second grades is also same like in one month 30 days
rewarded salaries and the first grade is like you work for 20 days and they will pay you for one
month or 30 days.
2. Bonuses are given in this ministry like if any employee which are in trouble but have solid
reason for problem will be give some bonuses. Method for bonus is like for example a employee
which are working for the ministry have monthly salaries fifteen thousands (15000) Afghani so
the bonus will be paid ten thousands (10000) Afghani so more than fifteen thousand Afghani
bonuses is not acceptable in the law of the ministry.
3. PITY pension are for those government employees which ages are above than sixty-five (65)
years or for those employees which are working for forty (40) years can get the pension from the
government. This finance ministry has two type of pension one is for above ages (65) or have
more work than forty (40) year.
4. Acclamation letter are for those employees whom are creative and innovative in their work.so
for any employee whom are creative and innovative the ministry give acclamation like half of
their monthly salaries. For example, if an employee has twenty thousand (20000) Afghani
monthly salaries so the acclamation will ten thousand (10000) Afghani.
Accomplishment:

 Process of paying office

 Checking of document value bank
 Understanding treasury department
 Book keeping process
 Management of budget
 Understanding and Performing the AFMIS (Afghanistan financial management
information system)
 Understanding and performing SIGTAS (standard integrated government tax
administration system
 Managing and process of tax and non-tax revenue at Afghanistan revenue department.

New knowledge Acquired:

Actually, working in this finance ministry was very beneficial for me. I applied all those
skills which I have learnt in my business study. And I understand that how the work should
be performed in practical and with the help of ministry staff I gained a lot of things which
I will discuss below.

AFMIS (Afghanistan financial management information system):

This system was very update system and very interesting for me and the other things that
neighbor of Afghanistan don’t have this system it was totally new experience for me learning this
system. So AFMIS (Afghanistan financial management information system) reception and
conclude with
1. Registration
2. Providing guidance to the visitors
3. Receiving / returning official document
4. Receiving /returning computers
5. Escorting visitors to AFMIS
6. Setting appointments

AFMIS system was bought from Canada in 2002 before this the system in Afghanistan was not
computerizes so this AFMIS system was the first system at Afghanistan which every finance data
they can save in computer however this AFMIS has three office.
1. Financial support
2. Technical and IT
3. Server room or data based
So, in 2007 all Afghanistan 34 province had this system. The process of this system is reporting
/editorship and subaccount/winder. At every province and every institute or organ have data of
saving and expense have different code for example for university teacher 2343, milartary5656
and for police 0098. The other things are that charted account is also available in this system.
Finally, fresh qualified student will first recruit in province their they will train, have work shop
for them after that they send to center for one month to use and familiar with the system.

MTO (Medium tax office):

At first, I have learnt the process of medium tax payers.

 Providing the declaration to supply services offices.

 Sending file to accounting office (cashing).
 Sending file to accounting office (assessment).
 sending file to of filing office
 sending file to case manager
 Sending file to committee of risk.
 issuing of elementary to hold over

MTO Job:
1. Checking
2. Supply services
3. Implementing of law
Custom revenue department:
Understanding taxes
 direct tax process
 indirect tax process

NTR (non-tax revenue):

The major sources of non-tax revenue
 Hire and rent of airplanes
 Service mobile phones
 Airlines fee from airfields
 Mining royalty
 foreign nationals visa fee
 passport and other income (ministry of interior)
 Afghanistan railway service
 Air traffic revenue

SIGTAS (standard integrated government tax administration system):

This system was in the revenue department of Afghanistan. The SIGTAS system check the
taxes automatically and can no error or mistake arise. If any problem occurred so this
system automatically makes it right and convert it in further process.

Experience:
During my SIX-week internship at MOF I have learned and gain the different types of experience
and beside of this knowledge i learn new skills through my practical work. I worked with different
department which had help to groom my personality and I know how to perform applied work
in corporate culture.
The field which I have work in my internship was financial and accounting and this department
give me some special experience which I will share now like to understanding the Afghanistan
financial system actually it gave me an idea that how Afghanistan finance ministry are
performing and controlling the budget.
This internship was all about to perform some practical work in my life and also it was the
requirement of COMSATS University of Management Sciences. So, from here I will discuss that
what the main things I have learned and gained the different experience. Firstly, I would say the
AFMIS (AFGHANISTAN Financial Management Information System) was really an update system
I have learned some things different here all the process of fiancé ministry was performed and
control from here. Afghanistan paying system, budgeting system and treasury department
system, book keeping system, data entry system, process of monthly salaries, controlling and
management of the finance ministry.
The second main things I have learned in Afghanistan revenue department was the SIGTAS
(Standard integrated government tax administration system) in this system all the Afghanistan
tax and non-tax process are controlling and managing from here. In this system all the taxes like
taxes from LTO (large tax office), MTO (medium taxpayer’s office) and STO (small taxpayer’s
office) are processing, checking and controlling.
I am really inspired from all these department staff they were very hard working and friendly
with me and from them I have learned these systems that how they are processing the system.
So, at beginning of work it is not easy to performing the job so same for me at the first I faced
many problems but with help of staff and friendly environment I did my best and gain the skillful
experience.