DATE DOWNLOADED: Thu Aug 14 03:01:43 2025

SOURCE: Content Downloaded from HeinOnline

Citations:
Please note: citations are provided as a general guideline. Users should consult their preferred
citation format's style manual for proper citation formatting.

Bluebook 21st ed.

Ataullah & Naila Nazir, The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan, 16 CONTEMP. READINGS L. & SOC. JUST.
740 (2024).

ALWD 7th ed.

Ataullah & Naila Nazir, The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan, 16 Contemp. Readings L. & Soc. Just.
740 (2024).

APA 7th ed.

Ataullah, & Nazir, Naila. (2024). The tax evasion practices in immovable property tax
collection in jalalabad district of afghanistan. Contemporary Readings in Law and
Social Justice, 16(1), 740-759.

Chicago 17th ed.

Ataullah; Naila Nazir, "The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan," Contemporary Readings in Law and
Social Justice 16, no. 1 (2024): 740-759

McGill Guide 10th ed.

Ataullah & Naila Nazir, "The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan" (2024) 16:1 Contemp Readings L & Soc
Just 740.

AGLC 4th ed.

Ataullah and Naila Nazir, 'The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan' (2024) 16(1) Contemporary Readings
in Law and Social Justice 740

MLA 9th ed.

Ataullah, and Naila Nazir. "The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan." Contemporary Readings in Law and
Social Justice, vol. 16, no. 1, 2024, pp. 740-759. HeinOnline.

OSCOLA 4th ed.

Ataullah & Naila Nazir, 'The Tax Evasion Practices in Immovable Property Tax
Collection in Jalalabad District of Afghanistan' (2024) 16 Contemp Readings L & Soc
Just 740 x Please note: citations are provided as a general
guideline. Users should consult their preferred citation format's style manual for
proper citation formatting.
Cite this document
PinCite this document

-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Contemporary Readings in Law and Social Justice
ISSN: 1948-9137, e-ISSN: 2162-2752
Vol 16 (1), 2024
pp. 740 - 759

The Tax Evasion Practices in Immovable Property Tax

Collection in Jalalabad District of Afghanistan

Ataullah', Naila Nazir 2

'Ph.D. Scholar, Department of Economics, University of Peshawar, Pakistan;
E-mail: Ataullahmuneeb101@[Link]
2
Chairperson, Department of Economics, University of Peshawar, Pakistan,
E-mail: Nailauom@[Link]

Abstract: This research explores the tax evasion practices associated with collecting immovable property
taxes in the Jalalabad district of Nangarhar province. A qualitative approach was employed to delve into
these issues, with primary data gathered through structured interviews conducted with local authorities.
The findings of the study remarkably demonstrate that the common factors of IPT tax evasion are
inadequate regulation, ineffective enforcement of reporting standards, lack of ownership information,
bribery and corruption, the underground economy, false property information, and illegal property
transactions. Beside this, the findings significantly further demonstrate that immovable property tax
evasion is influenced by several cultural and socioeconomic issues that include limited access to education,
perceived instances of corruption, and a lack of faith in governmental institutions. Eventually, the findings
further demonstrate that NRD primarily use property inspection and financial audits as means to ascertain
instances of immovable property tax evasion. The local authorities are strongly recommended to
implement measures to enhance transparency in tax collection processes to combat tax evasion.

Keywords: Tax Evasion, Immovable Property Taxation, Qualitative Analysis, Thematic Analysis

Received:17 March 2024 Revised:20 May 2024 Accepted:18 June 2024

1. Introduction
The issue of tax evasion in the collection of immovable property taxes is a significant challenge in the Jalalabad
District of Afghanistan. This research delves into the various practices that contribute to tax evasion in this region,
where the efficiency of tax collection is hindered by a range of factors including corruption, lack of transparency,
and weak regulatory frameworks. Understanding these practices is crucial for identifying the gaps within the
existing tax collection system and proposing effective measures to enhance revenue generation and ensure fair tax
administration in the district.

The collection of immovable property tax is especially relevant in Jalalabad district that functions as a major
economic center in eastern Afghanistan. Lazovid-Pita and Mocevid (2018)have pointed out that the district's
growing urbanization and informal settlement growth make tax assessment and collection procedures more
complex. In addition, problems like as corruption, political instability, and security concerns complicate the tax
administration system, affecting attempts to generate money. Hence, conducting a thorough examination of the
difficulties encountered in property tax collection in Jalalabad is crucial, not only for comprehending the local
intricacies but also for guiding policy measures targeted at enhancing revenue mobilization and administration in
the area. Broadly, the unwillingness to pay tax, the rise of the shadow economy during the wars, disdain towards
regulation designed to curb market monopoly, the lack of loyalty towards public institutions and low tax morale
have become the common factors associated with tax evasion in the present day of Jalalabad district in Nangarhar
province. Further, a number of immovable property taxable activities remain untapped by the local government
as a result of high instances and dependency on cash and cash-based transactions that are difficult to track
740
[Link]
(Gallagher, 2007).

Immovable property taxation has established itself as an essential component of Jalalabad's tax structure.
Additionally, immovable property tax is levied in Jalalabad on immovable properties such as flats, residences,
offices, factories, stores, and land. However, the local authorities of Jalalabad are not able to collect the immovable
property taxation in efficient manners. The reason behind the inefficient collection of IPT is several folds. Firstly,
Afghanistan is a war torn country and it is quite essential to generate a stable revenue sources. However, the
Afghan government is making efforts to develop indigenous immovable property taxation revenue sources to
stabilize the expenditures of municipalities at local level. Secondly, the immovable property taxation may help
expanding the Afghan state's sphere around the globe. Thirdly, a real state can't be built without the means to
generate revenue. To guarantee accurate tax assessment and collection, robust institutions and capable revenue
agencies are required. Fourth, lack of standard fiscal administration build up the gap between the potential and
actual immovable property taxation toward the local government and hence, it is to be considered as hindered
toward the efficient collection of immovable property taxation (Rahman et al., 2021). Fifth, taxation through land
and immovable property taxes as well as customs and border collections can extend the territorial influence of the
Afghan state. The diversity of the tax base reflects the Afghan state's ability to engage with various sectors and
regions illustrating the extent of the state's authority within society.

Immovable property taxation holds immense potential for local authorities compared to other forms of taxation.
Unlike income or sales taxes, immovable property taxes offer a stable and predictable revenue stream as the value
of land and buildings tends to appreciate over time. This consistency allows local governments to plan and allocate
resources more effectively ensuring the provision of essential services and infrastructure development.
Additionally, immovable property taxation can be a progressive tax with higher-value properties bearing a larger
tax burden, potentially promoting greater equity in wealth distribution. Moreover, it encourages responsible land
use and discourages property speculation aligning with broader urban planning and sustainability goals. Thus,
immovable property taxation serves as a crucial tool for local authorities to enhance fiscal sustainability and
achieve long-term economic stability.

Immovable property taxation in Afghanistan is a complex issue that holds significant potential for revenue
generation and provision of public services to the society. A notable research gap exists in the analysis of the
challenges and growth prospects of immovable property taxation in Afghanistan. However, there is a growing
body of literature on immovable property taxation in developing countries. But there is a scarcity of in-depth
research that specifically examines the unique hurdles and opportunities faced by Afghanistan in implementing
and improving immovable property tax systems. Additionally, the taxation of immovable property in Afghanistan
remains a critical but underexplored area in the realm of fiscal policy and economic development. Despite its
potential to generate substantial revenue for the government and promote equitable resource distribution, there is
a notable scarcity of comprehensive research on this subject. No attention given to the tax evasion and implications
of immovable property taxation within the unique socio-economic context of Afghanistan. Bridging this research
gap is essential for policymakers and local authorities aiming to design and implement effective immovable
property tax policies that align with Afghanistan's specific needs and circumstances. Therefore, this research
would fill this gap by investigating the tax evasion practices in IPT in Nangarhar province of Afghanistan.

2. Literature Review
Immovable Property and Its Types

Immovable property taxation, a significant source of revenue for governments, involves levying taxes on
properties that cannot be moved, such as land and buildings. This form of taxation is often seen as equitable
since it is based on the value of property, reflecting the taxpayer's ability to pay. Immovable property taxes
are also considered stable and predictable, providing a reliable income stream for local governments to
fund public services. However, the efficiency and fairness of these taxes can be influenced by the accuracy
of property valuations and the design of the tax system. Effective property tax administration is crucial for
ensuring compliance and minimizing the economic distortions that such taxes can create (Bird & Slack,
2004). Following are the various types of immovable property taxation.

Firstly, Land tax is specifically levied on the value of the land itself, rather than the overall value of the
property or any structures on it. This encourages efficient use of land and discourages land hoarding. Land
taxes can be progressive, with higher rates for larger land holdings. This type of tax can be used to
741
[Link]
encourage development and discourage speculative holding of undeveloped land (Bahl, 2004; Norregarrd,
2013; McCluskey and Franzsen, 2001). Secondly, Immovable Property Transfer Tax is a tax imposed on the
transfer of immovable property from one individual to another. It is also referred to as transfer duty that is
paid by individuals acquiring immovable property (Norregarrd, 2013). It's also applicable when the
property's value is increased through the relinquishment of a property-related right (Bird and Slack, 2004).
McCluskey and Franzsen (2001) stated that this tax is generally calculated based on the property's market
value at the time of sale. According to Bahl (2004), high transfer duty rates lead to the underreporting of
sale prices (tax evasion) that undermines tax revenue and property market information accuracy.
McCluskey and Franzsen (2001) suggested that a lower immovable property tax rate could incentivize
accurate reporting of sale prices.

Thirdly, according to McCluskey and Franzsen (2001), Capital Transfer Tax (CTT) that is also known as
estate duty is a tax applicable to the assets left behind by a deceased individual. This tax aims to impose a
financial obligation on the wealth acquired by heirs through inheritance or gifts. The tax becomes due when
the ownership of a property is shifted from one person to another. McCluskey and Franzsen (2001) further
explained that the responsibility for paying CT arises through various scenarios including the transfer of
assets upon the owner's death and the gifting of assets during the owner's lifetime. Unlike transfer duty
that applies to property transactions involving sales, CTT targets property acquired through inheritance,
gifts, and donations. Watson points out a drawback of inheritance tax and argue that it can lead to double
taxation. It is due to that the individuals often find themselves subject to both capital gains tax for inherited
property and estate duty for the same assets. Fourth, according to (Bird & Slack, 2004), Tax on Rental
Income (TORI) is the responsibility that landlords in relation to the rental charges they amass from
individuals or entities that lease their properties. Similarly, McCluskey and Franzsen (2001) portrayed this
tax as the imposition placed on the rental earnings accrued by both individuals and corporate bodies. This
tax pertains to the annual gains acquired as rent by property owners and subsequently fulfilled by these
same landlords. Bahl (2004) clarified that expenses linked to property upkeep and other additional outlays
necessary for maintaining the property's value are deducted from the total revenue prior to the application
of the tax. Consequently, the tax is calculated based on the net income procured by the property owner. The
underlying basis for computing this kind of tax revolves around the projected annual rent achievable
through a fair market transaction. Bird & Slack (2004) noted that the challenges faced by this tax framework
encompass the lack of data concerning actual rent payments and the inadequacy of available properties in
the rental market, which complicates the evaluation procedure.

Fifth, a Capital Gains Tax (CGT) is defined as a tax imposed on the earnings generated from selling the
immovable property at a higher value than their original purchase price. This tax applies to the gains or
losses resulting from the sale of an asset, reflecting the profit attained when selling an item bought at a
lower cost. The disparity between the base cost (initial cost) of an impacted property and the obtained or
assumed proceeds upon its sale constitutes a Capital Gain or loss. Mathur et al. (2009) explained that this
tax primarily targets the appreciation of wealth through capital growth rather than income. The obligation
to pay this tax arises when an accountable individual carries out a taxable sale of assets subject to the tax.
Finally, Real estate tax is a common form of immovable property taxation. It involves taxing the value of
real estate properties owned by individuals, businesses, or other entities. The tax rate is usually a
percentage of the assessed value of the property. This type of taxation can vary widely depending on the
jurisdiction. Immovable property tax revenue is often used to fund local government services, such as
schools, infrastructure, and public safety (Majingo, 2016).

VALUATION AND ASSESSMENT METHODS OF IMMOVABLE PROPERTY TAXATION

Three fundamental techniques for valuation have emerged: comparisons based on sales (or rentals), income
capitalization, and cost approach. Multiple variations of their application exist and certain combined
methodologies incorporate components from two or even all three techniques. The distinguishing factor among
these approaches lies primarily in the types of market data they rely upon. While all three methods necessitate
data on real-market, arms-length transactions such data are particularly integral to the sales comparison approach
that tends to be the favored method when a sufficient number of sales transactions are available. The income

742
[Link]
approach and the direct comparison of rental rates in the determination of annual rental values also require
information on rents and often associated expenses of renting properties.

* Sales Comparison Approach

Within the framework of the sales comparison approach, the objective is to examine how variations in
characteristics among recently sold properties-such as their purpose, size, location, and quality of structures-
impact their prices. This insight is then utilized to formulate valuation models that subsequently aid in
approximating the values of both sold and unsold properties. In cases where there is a substantial number of recent
sales for the property type under consideration-commonly seen with residences and occasionally with smaller
office and retail properties-statistical methodologies can be employed to assign values to each quantifiable
characteristic. As a result, valuation can be carried out with a notable degree of reliability. Conversely, in situations
where sales transactions are sporadic or widely dispersed across a vast geographical area and properties exhibit
distinct traits. Therefore, the sales comparison approach becomes more intricate to implement (OECD, 2014).

* Income Capitalization Approach

The income approach gauges the current worth of forthcoming income with two distinct methods: direct
capitalization and discounted cash flow (DCF). The direct capitalization method entails (a) evaluation of existing
market rents and relevant property expenditures. (b) utilization of an all-encompassing capitalization rate to
convert the anticipated income flow into a present value as of the assessment date (OECD, 2014). The fundamental
mathematical correlation is:

Value = income + rate

Income is evaluated using the genuine rents of analogous properties, minus taxes, insurance, other relevant
operational costs, and capital outlays, and accommodating anticipated occupancy rates.

The process of ascertaining value through discounted cash flow (DCF) analysis demands predictions for every
year's cash flow (net operating income) across a presumed ownership duration, the eventual value at the conclusion
of this span, and the annual capitalization rate for each year. Subsequently, these anticipated incomes are
discounted using the suitable discount rate, yielding the market value as of the valuation date, outlined as follows:

CF1 CF2 CFn CFterminai

Value= + +--+
(1 +i) (1+i )2 (1+i)n (1 +i)n

where CF1, ... ,CFn is each annual cash flow over the holding period; n is the number of periods; CFterminal is
the residual (capital) value at the end of holding period; and i is the discount rate applicable in each period.

While lacking the versatility of DCF, direct capitalization is typically employed in immovable property valuation
for taxation purposes. In theory, the income capitalization approach holds precedence over alternative methods
when assessing properties frequently subjected to rentals, as it mirrors the mindset of stakeholders in investment
property markets. However, challenges in sourcing essential data can sometimes restrict the approach's utilization.
Instances in which income and expense information for rental properties is accessible have demonstrated
successful utilization of the income approach in large-scale valuation scenarios for typical income-generating
properties (OECD, 2014).

* Cost Approach

The cost approach encompasses the independent estimation of land value and building value, subsequently
combining them to derive an assessment of real estate value. Land value pertains to the price at which unoccupied
(undeveloped) land, sharing the same location, size, shape, physical attributes, and permissible applications as the
presently improved parcel, would be traded within the open market. The vacant land transactions serve as the most
reliable indicators of land market value; methodologies exist for approximating land values based on transactions
involving developed properties (OECD, 2014).

In principle, the value of a building is derived from the replacement (or replication) cost minus the accumulated
depreciation. The replacement cost signifies the expenses involved in substituting the existing structures and other
enhancements with new ones of equivalent utility, although not necessarily adhering to the same design and

743
[Link]
construction methods and materials. This approach is commonly adopted for practical reasons. On the other hand,
the replication cost represents the expenditure required to replicate the existing enhancements. Accrued
depreciation encompasses any decline in value due to physical deterioration, functional inadequacies, and
economic (or external) obsolescence (OECD, 2014).

It's worth noting that the significance of location can sometimes be overlooked; it can positively impact building
values just as it does land values. When a building or unit within a building is sold, its price incorporates the value
of its location, which is also an aspect of land value. Thus, certain cost approach systems account for economic
condition factors that can be positive, thereby resulting in a total property value exceeding the summation of land
value and building construction cost. Conversely, economic condition factors can also be negative to
counterbalance any deficiencies in typical depreciation allowances. These factors are established by analyzing the
ratios of cost approach values to actual sale prices, as discussed later. Failure to acknowledge underlying market
realities might lead to underestimated property values and could potentially distort land use patterns, especially in
urban settings. Accurately addressing location value becomes particularly crucial when land and buildings are
assessed separately and subjected to distinct taxation (OECD, 2014).

Several nations rely on valuation methodologies that rely very little on current and direct market evidence. Some
of these methods are rooted in concepts from socialist eras that largely disregard actual prices, instead considering
factors such as population, urban infrastructure (roads, transportation, utilities, etc.), proximity to governmental
and communal amenities (schools, hospitals, shops, etc.), overall aesthetic appeal (quality of structures), and
environmental conditions (ecological, air, water). Such methodologies are challenging to maintain due to the
substantial data requirements they entail (OECD, 2014). Despite certain factors indeed influencing values, these
methods don't make use of direct market evidence. Essentially, the various indices produce values that are
somewhat arbitrary (although better than completely disregarding location factors).

Immovable Property Taxation in Developed and Developing Countries

Immovable property taxation differs significantly between developed and developing nations, reflecting
variations in administrative capacity, economic structure, and governance. In developed countries,
property taxes are often a key revenue source for local governments, with well-established systems for
property valuation, assessment, and collection. These nations typically employ transparent and efficient
tax administration processes, with tax revenues funding essential public services like education,
infrastructure, and safety. In contrast, developing nations face challenges such as incomplete property
registries, limited administrative capacity, and tax evasion. These challenges hinder the effective
implementation and enforcement of property taxation, often resulting in lower revenue collection and
underfunded public services. Consequently, property taxation in developing countries is frequently less
efficient and less equitable, exacerbating disparities in wealth distribution and access to essential services.
Mathur et al. (2009) conducted an analysis to gauge the prospective impact of immovable property taxes
in India. They have outlined the strategies to effectively collect the potential level of immovable property
taxation. Their findings indicated that property taxes in India have not been harnessed to their fullest
capacity. The utilization of taxes for generating revenue is subpar, often due to insufficient endeavors made
by the individual states involved.

Fischel (2013) explored the connection between taxation and public services, highlighting how elevated
costs of community commodities contribute to improved and effective services that is driven by the
significant role of property tax as a vital revenue stream for public service provision. Additionally, the
author detailed the underlying structure of the tax system that hinges upon property valuation and
introduced concepts such as prohibiting new constructions on existing properties for the purpose of
enhancement. Nonetheless, the lack of a well-structured tax framework in countries like India hindered the
government's ability to substantiate the soundness of these conceptual frameworks. Inadequate
administration is recognized as a major obstacle to property tax mobilization in developing countries (Bahl
et al., 2010). Existing literature highlights deficient and outdated property registers and valuation rolls as
primary impediments. Another hurdle to effective taxation stems from resistance posed by affluent
property owners, who can impede both policy reform and successful implementation (Bird and Slack, 2007;
Jibao and Prichard, 2016). Despite the relatively weak revenue performance, the reform of property tax
remains a prominent focus in policy discussions (Franzsen and McCluskey, 2017). Both analysts and

744
[Link]
government officials continue to search for transformative reforms that could enhance its revenue-
generating potential.

Glaeser (1996) conducted a comparative analysis of immovable property taxation and income taxation as
mechanisms employed by local governments. Both property and income taxes serve as regulatory tools due
to the feedback effects they generate within the local tax bases. Reduced flexibility enhances the quality of
local public services and enhances community appeal. The determination of whether property tax or
income tax offers more compelling incentives hinges on how the tax bases respond to reduced flexibility.
The author demonstrates that immovable property tax yields the strongest incentives when housing
demand is inelastic (leading to a slight increase in population size but a significant rise in property values).
He argue that this scenario of inelastic housing demand aligns with empirical observations.

Number of other studies in Malaysia has determined the challenges toward the property taxation including
property tax non-compliance, administration, regulation, and its procedure (Rahman et al., 2021; Atilola et
al., 2017,2019; Mohd et al., 2018; Sahari et al., 2020; Abdullah et al., 2022; Ross and Mughan, 2018). A study
by Nyabakora et al. (2020) in Tanzania depicts the same ground of the findings. Asher and Nandy (2018)
investigated the immovable property taxation in Singapore. The findings proposed that the potential of
immovable property taxation is limited in the future and thus, the actual and potential property taxation is
diverging. A similar study by Lazovit-Pita and Modevit (2018) in Bosnia and Herzegovina demonstrated
that insufficient reliable long term data is impediment towards the efficient collection of property taxation.

Norregaard (2013) emphasized that about half of the property yield taxes in a range of developed,
transitional, and developing nations have been in the form of recurrent taxes on immovable property. His
findings revealed that developed countries exhibit property tax revenue to GDP ratios three times higher
than transitional and developing countries.

Bird et al. (2002) aimed to present an all-encompassing review of literature concerning land and property
taxation. They have referenced the tax structures of around 40 nations within their current research. The
authors examined the diverse aspects of inadequacy, uncertainty, intricacy, and heterogeneity within the
tax systems of each country. The author concluded that potential transformations that may occur over an
extended period will have a remarkable effects on the revenue collection from immovable property
taxation.

Dalsgaard (2000) tested the primary shortcomings within the immovable property tax system of Mexico.
The author identified that the Mexican urban area having the least proportion of tax revenues in
comparison to GDP among OECD nations. He recommended that enhancing property taxation, especially in
real estate, should primarily focus on removing tax privileges for sectors such as agriculture, fisheries,
publishing, land transportation, and fiscal subsidies. Furthermore, administrative efficiency could be
enhanced by merging social and tax databases. Bahl and Bird (2008) observed that a significant portion of
spending in China is distributed at the local level, yet there is almost no autonomous power for taxation.
The need for infrastructure advancement has resulted in substantial borrowing by regional
administrations, prompting worries about their elevated levels of debt. Additionally, local governments
have turned to selling land usage rights to generate income, potentially driving faster development than
what market conditions warrant. The principal income source has been revenue from land concessions,
constituting roughly 70% of local earnings in 2010 and decreasing to 45% by 2013.

De Cesare (2004) presented findings from a study involving 52 municipalities in Latin America, indicating
that immovable property tax contributes an average of 27 percent to local government tax income. This
pattern is also observable in transition countries. For instance, property taxes constitute 8 percent of locally
generated revenue in Central and Eastern European countries. These observations offer a distinct
viewpoint, highlighting that immovable property tax holds significance within the fiscal decentralization
strategy of developing and transition countries, even if it plays a less prominent role in the broader
government revenue mobilization strategy.

Property tax rates exhibit substantial variation across different geographical regions, largely driven by the
diversity in local public services funded through these taxes. The Tiebout hypothesis posits that if

745
[Link]
relocation were cost-free and numerous neighborhoods offered varying tax-service combinations,
households would consistently reside in their preferred localities. Elderly homeowners in high property
tax regions benefit from better local public services they value. Yet, the reality is that moving entails
expenses and households do not regularly adjust their housing preferences. For instance, elderly
homeowners who relocated to high property tax areas two decades ago may no longer reap the benefits of
good public schools, as their children have since grown up and moved away. As a result, they might opt to
move to areas with lower taxes and services. Economists have acknowledged that, after accounting for local
factors like public amenities and services, property taxes get factored into house prices. Studies like Palmon
and Smith (1998) and de Bartolom6 and Rosenthal (1999) offered compelling empirical proof of significant
property tax capitalization. Nevertheless, even with full capitalization, property taxes can still influence the
decisions of elderly homeowners to move. For example, if higher property taxes constrain the liquidity of
elderly homeowners, they might be compelled to downsize to smaller, lower-taxed homes.

3. Research method
Research Design

The qualitative strategy has been adopted in this research study to investigate the tax evasion practices in
IPT collection in Jalalabad district of Nangarhar province - Afghanistan. There are several reasons for using
the qualitative aspect of the mixed strategy that is discussed with the help of few critical points. Firstly, it
belongs to the constructivist ontological framework since it departs from a non-empirical philosophy.
Secondly, the phenomenon may be better grasped in its proper setting with the use of a qualitative
approach to the inquiry. Thirdly, the qualitative research doesn't deal with the scientific research and thus,
it is nonscientific technique. Therefore, our study has used the qualitative strategy for investigating the
common tax evasion practices in Jalalabad district of Nangarhar province.

Population and Sample

The population of this study is comprised of all directors of NRD (Nangarhar Revenue Department), deputy
directors of NRD, property tax collectors, senior tax administrator, district governor, and senior provincial
authorities in Jalalabad district of Nangarhar province - Afghanistan. The researcher has been conducted a
structured interview with the prospective respondents to identify the tax evasion practiced of immovable
property tax collection that are pertained toward the local authorities. Furthermore, the sample size for
our study is 20 prospective respondents. There are no clear criteria for selecting the sample size threshold
level in the qualitative research. However, this sample size can be justified for our study based on several
critical reasons by majority of the researchers. This research has been used the purposive sampling
technique, which is the most appropriate technique for fulfilling the objective tax evasion practices in IPT
collection in Jalalabad district.

Data Collection

The primary data was gathered through structured interviews to explore the tax evasion practices in IPT
collection in Jalalabad district. The researcher personally conducted these interviews with all directors of
the Nangarhar Revenue Department (NRD), deputy directors, property tax collectors, senior tax
administrators, the district governor, and senior provincial authorities in Jalalabad district. In precise, a 20-
30 minutes in-depth personal structured interview was conducted with the all directors of NRD, deputy
directors of NRD, property tax collectors, senior tax administrator, district governor, and senior provincial
authorities in Jalalabad district to answer the research questions of the study.

Data Analysis

The objective of the study is to identify the common and precise tax evasion practices in Nangarhar
province of Afghanistan, the primary data has been obtained through structured interview that has been
conducted with the 20 prospective participants. The thematic analysis has been used to the common and
precise tax evasion practices that are pertained in the local tax system. Identical to the first objective of the
study, we have been adopted the Braun and Clarke (2006) six steps of thematic analysis that include
familiarization, coding, search for themes, reviewing themes, identifying themes, and writing up,

746
[Link]
respectively. These six phases have been assisted us in identification of the common and precise tax evasion
practices. Therefore, the Nvivo 24 has applied for the thematic analysis for the aim of withdrawing the
common and precise tax evasion practices hold in the local taxation system.

4. Research Results
This section would broadly illustrate the tax evasion toward the immovable property taxation. This section
would shed lights on the common form of IP tax evasion, reasons for property owners evading taxes,
societal and cultural factors contributing toward the IPT, and identification and investigation of tax evasion
cases.

Common Form of IP Tax Evasion

The interviews with the potential interviewees have revealed that the common factors of IPT tax evasion
include inadequate regulation, ineffective enforcement of reporting standards, lack of ownership
information, bribery and corruption, the underground economy, false property information, and illegal
property transactions. The prevalent common factors of tax evasion identified during the interview session
with the potential participants is broadly highlighted in Table 1

Table 1: Common Form of Tax Evasion in Case of Immovable Property Taxation

Unreported Transactions 15% 85% 0% 0% 0%

Lack of Regulation 0% 0% 5% 5% 90%

No Thresholds on Funds Transfer 15% 0% 85% 0% 0%

Smuggling 10% 10% 80% 0% 0%

Weak Implementation of Reporting Standards 0% 0% 0% 10% 90%

Absence of Information on Ownership 0% 0% 0% 10% 90%

Trade in Narcotics 0% 10% 90% 0% 0%

Bribery and Corruption 0% 0% 0% 0% 100%

Technology 15% 5% 80% 0% 0%

Money Laundering 25% 75% 0% 0% 0%

The Underground Economy 0% 0% 0% 15% 85%

Underreporting Property Value 0% 0% 0% 10% 90%

False Property Information 0% 0% 0% 0% 100%

Illegal Property Transactions 0% 0% 0% 0% 100%

Claiming False Exemptions 15% 85% 0% 0% 0%

Source: Interviews Conducted with the Participants (2023)

747
[Link]
All interviewees unanimously agreed that the most prevalent type of tax evasion is illegal property
transactions. The findings significantly revel that 100% of the participant strongly agree that illegal
property transaction is the common factor of tax evasion toward the IPT and this notably mitigated the
immovable property taxation. It is strongly agreed that illegal property transactions are a prevalent
occurrence and constitute a substantial manifestation of tax evasion, exerting a considerable influence on
the collection of Immovable Property Tax (IPT). The prevalence of illegal property transaction and its
harmful impact on IPT earnings is emphasized by the majority of interviewees. The majority agreement
among participants highlights the urgent necessity for implementing strategies to tackle illegal property
transactions, thereby guaranteeing equitable and efficient tax collection procedures. The findings of this
factor is in line with the Gupta (2007), and Richardson (2006).

Furthermore, the results of the study notably demonstrate that 100 % of the participants agree that false
property information is the second common means of evading taxes. The dominant viewpoint among the
participants emphasizes the extensive presence of this deceitful behavior, as the majority emphasizes the
disturbing frequency of false property information provided to local authorities. Therefore, the extensive
transmission of inaccurate information greatly diminishes the efficient operation of immovable property
taxes, resulting in considerable decreases in tax income. The result of the study is supported by Tawheed
(2022), Miskam (2013), and Groenland and Veldhoven (1983).

Bribery and corruption are identified as the third most widespread types of tax evasion. The findings reveal
that 100% of the interviewees are strongly agree that bribery and corruption is another common factor for
tax evasion and this has significantly dampened the immovable property taxation. The result further
highlights the widespread prevalence of bribery and corruption in the affairs of immovable property
taxation with a majority of them underlining the participation of both local authorities and taxpayers in
these unlawful practices. The prevalence of such misconduct greatly diminishes the effectiveness of
immovable property taxation. Thus, the local authorities are not able to efficiently collect the immovable
property taxation. Therefore, this would result in considerable declines in taxation of immovable property.
It is crucial to prioritize endeavors aimed at addressing bribery and corruption to preserve equity and
honesty within tax systems and to protect public interest. The result of the study is supported by Tawheed
(2022), Miskam (2013), and Groenland and Veldhoven (1983).

The lack of ownership information is the fourth most prominent form of tax evasion, as shown by 90% of
the respondents strongly agreeing during interviews. The predominant perception among respondents
highlights the significant dearth of relevant ownership data, hence posing challenges in properly
ascertaining property owners. Therefore, this inadequacy greatly reduces the efficiency of taxing
immovable property and leads to a decline in IPT. However, 10% of the participants are agree that lack of
ownership information is a common factor for tax evasion that notably caused to mitigate the immovable
property taxes. Efforts aimed at addressing this problem are necessary to uphold the principles of equity
and effectiveness within tax systems, as well as to enhance the IPT to local authorities. The result of the
study is supported by Tawheed (2022), Miskam (2013), and Groenland and Veldhoven (1983).

The fifth most common form of tax evasion is underreporting property value, with 90% of respondents
strongly agreeing during interviews. Most respondents highlight the widespread problem of property
values being underreported, specifically highlighting the permissive reporting procedures seen among
local authorities. The widespread phenomenon of underreporting has a substantial negative impact on the
generation of immovable property taxation. Despite of this, 10% of the participants argue that
underreporting property values is common factor for tax evasion and this would significantly reduce the
immovable property taxes. The need of adhering strictly to reporting rules and laws is emphasized to
properly address this problem. The resolution of underreporting necessitates collaborative endeavors to
uphold precise reporting protocols and establish strategies to dissuade non-adherence, so safeguarding the
integrity of tax systems and optimizing tax collection. The findings of this factor is supported by Purwanto
and Indrawan (2019) and Kayranto (2021).

The weak implementation of reporting standards emerges as the sixth most prevalent form of tax evasion,
as shown by 90% of the participants expressing strong agreement throughout the interviews. Most

748
[Link]
respondents emphasize the insufficient focus of local authorities on adopting reporting criteria,
highlighting the substantial impact this gap has on collection or immovable property taxes. On the other
hand, 10% of the participants are agree that weak implementation of reporting standards is a serious issued
toward the efficient collection of immovable property taxation. Non implementation of reporting standards
would definitely worsen the immovable property taxation and its collection. Based on the findings of the
study, we can recommend the local authorities that there is a sufficient need of placing a high priority on
adhering to reporting requirements to guarantee precise taxes and its collection. Graph 10 precisely
highlight the common factors of tax evasion in Jalalabad district of Afghanistan. The findings of this factor
is in line with the Gupta (2007), and Richardson (2006).

Graph 1: Common Forms of Tax Evasion

Illegal Property Transactions 100

False Property Information

Bribery and Corruption 100

Absence of Information on Ownership 0

Underreporting Property Value 0

Weak Implementation of Reporting

Standards

Lack of Regulation
-

The Underground Economy

75% 80% 85% 90% 95% 100%

U Strongly Agree

The results of the framework analysis indicate that a majority of the respondents think that the absence of
information on ownership, unreported transaction, inaccurate property information, illegal property
transaction, lack of regulation, bribery and corruption, and underreporting property value are the common
factors of tax evasion suffered by the local authorities of Jalalabad province in Afghanistan. The common
factors of tax evasion concluded from the framework analysis are highlighted in below Figure 1.

Figure 1: Common Form of Tax Evasion in Case of Immovable Property Taxation

Absence of Information on
Ownership

749
[Link]
 H Unreported Transaction

Inaccurate Property
Information

IP Tax Evasion Common Factors of Tax Illegal Property Transaction

Evasion

- Lack of Regulation

-k Bribery and Corruption

- Underreporting Property Value

Source: Framework Analysis 20

A participant of the study argues that the act of not accurately reporting property value is a substantial
problem that compromises the credibility of our tax system. Regrettably, a significant proportion of
governing bodies seem to be embroiled in corrupt practices, placing personal gain above the welfare of the
general people. The phenomenon of taxpayers being compelled to underreport their property values in
order to comply with unscrupulous activities is a worrisome development. The findings of this factor is in
line with the Gupta (2007), and Richardson (2006).

Reasons for Property Owners Evading Immovable Property Taxes

The interview sessions conducted with the prospective interviewees have revealed that there are multiple
reasons for evading taxes by the taxpayers. These reasons encompass a lack of awareness, financial
burdens, economic hardship, lack of trust in the tax system, distrust in the government, financial hardship,
incentives for evasion, as well as instances of corruption and bribery. The reasons for property owners
evading immovable property taxes obtained from the interview session conducted with the prospective
respondents would be broadly discussed in proceeding discussion as highlighted in Table 2.
Table 2: Reasons behind Immovable Property Tax Evasion

Financial burden 0% 0% 0% 0% 100%

High tax rates 15% 15% 70% 0% 0%
Economic hardship 0% 0% 0% 5% 95%
Lack of awareness 0% 0% 0% 0% 100%
Distrust in government 0% 0% 0% 10% 90%
Complex regulations 10% 10% 80% 0% 0%
Lack of enforcement 10% 15% 75% 0% 0%
Incentives for evasion 0% 0% 0% 15% 85%
Property value disputes 0% 0% 0% 20% 80%

750
[Link]
Privacy Concerns 20% 10% 70% 0% 0%
Financial Hardship 0% 0% 0% 15% 85%
Overvaluation Concerns 20% 80% 0% 0% 0%
Lack of Trust in Tax System 0% 0% 0% 10% 90%
Complexity of the Tax System 25% 75% 0% 0% 0%
Desire for Lower Tax Bills 0% 0% 0% 20% 80%
Corruption and Bribery 0% 0% 0% 20% 80%
Source: Interviews Conducted with the Participants (2023)

The primary cause for property owners dodging tax payments is a lack of awareness. The fndings
significantly reveal that 100% of the participants strongly agree that there is sufficient lack of awareness
about the taxes. According to their argument, immovable property owners often avoid paying taxes because
they have a basic lack of comprehension about their tax responsibilities and utilization of taxes for their
benefits. Significantly, there is a conspicuous lack of awareness campaigns and marketing to clarify the
services financed by taxation, which worsens the problem. These results highlight a severe lack of
awareness, which greatly reduces the taxation of immovable property. Efforts aimed at augmenting public
awareness about tax duties and the advantages of taxes are essential to tackle this matter and guarantee
equitable and efficient revenue collection for the advancement of the community. The findings of this factor
is supported by Purwanto and Indrawan (2019) and Kayranto (2021).

The second most prevalent reason contributing to property owners engaging in tax evasion is the financial
burden, as shown by a general agreement among all inquired about respondents. They argue that the need
to pay taxes is a substantial economic burden, causing taxpayers to be unable to meet their financial
obligations. The prospective respondents collectively affirm that all taxpayers, without any exemptions
have difficulties in completing their tax responsibilities and seeing it as a significant financial burden. These
results emphasize the prevailing notion that tax payments pose significant financial difficulties, hence
emphasizing the need for implementing strategies to mitigate this burden and promote fair tax compliance
among property owners to ensure the efficient collection of immovable property taxation. The result of the
study is supported by Tawheed (2022), Miskam (2013), and Groenland and Veldhoven (1983).

The occurrence of economic difficulty is identified as an important reason contributing to property owners
practicing tax evasion, as shown by the strong agreement of 95% of the respondents during the interviews.
The participants argue that the economic hardship they're confronted with pose significant difficulties, if
not insurmountable obstacles, in meeting their tax responsibilities. It is widely believed by potential
participants that a significant majority of taxpayers have difficulties in meeting their tax obligations as a
result of economic adversities. The current predicament has been intensified by the disintegration of the
Islamic Republic of Afghanistan, resulting in heightened financial burdens and a growing challenge in
meeting tax obligations within the designated timeframe. However, 5% of the participants of the study
argue that economic hardship is a significant concern affecting immovable property taxation. The findings
of this factor is in line with the Gupta (2007), and Richardson (2006).

The absence of confidence in the tax system appears as an important reason contributing to property
owners' involvement in tax evasion, as shown by 90% of the participants expressing strong agreement
throughout the interviews. They argue that taxpayers possess a profound mistrust towards the tax system,
as they believe that the funds obtained via taxation often wind up benefiting individuals rather than being
allocated towards public development and interest. The widespread lack of confidence in the tax system
has resulted in a significant decrease in the taxation of immovable property. In a similar fashion, 10% of
the participants highlights their general feeling that mistrust hinders tax compliance, hence posing
challenges for taxpayers in meeting their duties quickly. The findings of this factor is supported by
Purwanto and Indrawan (2019) and Kayranto (2021).

Another factor contributing to property owners committing tax evasion in immovable property taxes is
distrust in government. The taxpayers who own immovable property lack faith in the government and fear
that the IPT collected will not be allocated towards communal development, but rather used for personal
751
[Link]
expenses. The results indicate that 90% participants of the study strongly agree that distrust in government
is a reason for tax evasion by the taxpayers. Nevertheless, a significant proportion of 10% of the
participants argue that the only factor motivating taxpayers to engage in tax evasion is their lack of faith in
the government. The findings of this factor is in line with the Gupta (2007), and Richardson (2006).

Financial hardship is identified as an important reason that leads property owners committing tax evasion,
as shown by 85% of the participants expressing strong agreement throughout the interviews. The
participants of the study argue that taxpayers often encounter severe financial circumstances, which pose
difficulties in meeting their tax responsibilities and leading them to engage in tax evasion. The pervasive
economic adversity has a substantial role in the act of tax evasion pertaining to immovable properties.
Although only 15% of the respondents agree that financial difficulty as a contributing cause to tax evasion,
their viewpoint supports the idea that economic difficulties impede tax compliance, eventually affecting the
taxation of immovable property. The mitigation of financial hardship is of utmost importance to reduce the
strain on taxpayers and promote fair tax compliance, hence facilitating the collection of sustainable income.
The result of the study is supported by Tawheed (2022), Miskam (2013), and Groenland and Veldhoven
(1983).

The presence of incentives for tax evasion serves as a notable motivating reason for property owners to
committee tax evasion, as shown by 85% of the participants expressing strong agreement throughout the
interviews. The participants argue that taxpayers often possess motivations to engage in tax evasion, and
further assert that local authorities themselves are engaged in such illicit activities as a result of their own
incentives. The widespread adoption of this technique impairs the effectiveness of tax collecting endeavors,
hence aggravating the decline in taxation. However, 15% of the participants agree that the presence of
incentives for tax evasion and highlights the difficulties encountered by tax authorities in effectively
collecting tax revenue due to their self-interest. Graph 11 highlight the reasons for property owners evading
taxes as below.

Graph 2: Reasons for Property Owners Evading Taxes

Lack of awareness

Financial burden

Economic hardship

Lack of Trust in Tax System

Distrust in government 0

Financial Hardship

Incentives for evasion

Corruption and Bribery

Desire for Lower Tax Bills :0

Property value disputes :0

0% 20% 40% 60% 80% 100%

*Strongly Agree

752
[Link]
The results of the framework analysis indicate that a majority of the participants argue that reasons behind
evading taxes encompasses distrust on government, economic hardship, lack of awareness, financial burden,
motivation for self-interest, government policies, incentives for tax evasion, lack of education, and false
property information. The reasons behind tax evasion concluded from the framework analysis are
highlighted in below Figure 2.

Figure 2: Reasons behind Immovable Property Tax Evasion

Distrust on Government

H Economic Hardship

Lack of Awareness

A Financial Burden

IP Tax Evasion Reasons for Evading Taxes E Motivation of Self Interest

A Government Policies

Incentive for Evasion

Lack of Education

L4 False Property Information

Source: Framework Analysis in Nvivo 24

A participant of the study argues that the primary reason for tax evasion is the lack of awareness among
taxpayers. Government strategies for taxpayer education are lacking, as citizens remain unaware of where
their taxes are invested. Many taxpayers believe that collected taxes are solely for their personal benefit,
further perpetuating the tax evasion problem.

Cultural / Societal Factors Contributing toward Immovable Property Tax

The interviews with the potential interviewees have shown that there are several cultural and sociological
reasons that contribute to the avoidance of immovable property tax. Immovable property tax evasion is
influenced by several cultural and socioeconomic issues that include limited access to education, perceived
instances of corruption, and a lack of faith in governmental institutions. The main cultural and societal factors
that contribute highly toward the immovable property tax evasion would be broadly discussed in proceeding
discussion as highlighted in Table 3.

753
[Link]
 Table 3: Cultural and Societal Factors Contributing toward Immovable Property Tax Evasion

Enn

Perceived Corruption 0% 0% 0% 15% 85%

Informal Economy 20% 80% 0% 0% 0%
Social Norms 80% 15% 5% 0% 0%
Lack of Civic Responsibility 95% 5% 0% 0% 0%
Historical Factors 70% 30% 0% 0% 0%
Lack of Trust in Government 0% 0% 0% 25% 75%
Family and Community Influence 25% 75% 0% 0% 0%
Complexity of Cultural Practices 0% 20% 80% 0% 0%
Attitudes Toward Authority 100% 0% 0% 0% 0%
Lack of Education 0% 0% 0% 15% 85%
Source: Interviews Conducted with the Participants (2023)

The key socioeconomic and cultural issue that greatly leads to immovable property tax evasion is a lack of
education, as strongly agreed by 85% of the respondents during interviews. They argued that a significant
proportion of taxpayers possess inadequate education, resulting in a deficiency of comprehension of their tax
responsibilities, thereby reducing immovable property taxes. The pervasive absence of education among
taxpayers is a substantial obstacle to the effective tax collecting process. On the other hand, 15% of the
participants argue that lack of education is the main societal / cultural factor that contribute toward the
immovable property taxation. The local authorities are strictly required to provide trainings and awareness
session to the taxpayers to efficiently collect the IPT. The result of the study is supported by Tawheed (2022),
Miskam (2013), and Groenland and Veldhoven (1983). The findings of this factor is in line with the Gupta
(2007), and Richardson (2006).
Perceived corruption is identified as the second most significant social and cultural element that contributes
to the occurrence of immovable property tax evasion. This finding is supported by the strong agreement of
85% of the respondents throughout the interviews. They argue that the impression of corruption greatly
erodes public confidence in the tax system, resulting in decreased collection of IPT. Efficient tax collecting
activities are significantly impeded by the prevailing impression of corruption. Although only 15% of
interviewees recognize corruption as a barrier to the effective collection of immovable property tax, their
viewpoint emphasizes the significance of addressing corruption within local authorities to strengthen
immovable property taxation. Addressing perceived corruption is essential for rebuilding public confidence
and guaranteeing equitable and efficient tax collection for social progress. The findings of this factor is
supported by Purwanto and Indrawan (2019) and Kayranto (2021).
The primary socioeconomic and cultural issue that contributes to immovable property tax evasion is a lack of
trust in the government, as shown by 75% of the respondents strongly agreeing during interviews. The
findings significantly demonstrate that a pervasive absence of confidence in the government among taxpayers
poses a substantial obstacle to the taxation of immovable property. This is due to taxpayers' reluctance to
adhere to tax responsibilities when they harbor doubts about the government's capacity to efficiently and
openly allocate tax funds. The widespread absence of trust is a significant obstacle to the endeavors of
immovable property tax collection. The result further discloses that 25% of the participants agree that lack of
trust in government is a significant societal and cultural factor that affects immovable property taxation.
However, their viewpoint emphasizes the need to rebuild trust in government institutions to improve tax
compliance and ensure equitable revenue collection for societal progress. The resolution of this deficiency in
754
[Link]
trust is of utmost importance in promoting openness and accountability within the government, hence
enhancing the efficacy of immovable property taxes. The findings of this factor is in line with the Gupta (2007),
and Richardson (2006). Graph 3 represents the cultural and societal factors that highly contributing toward
the immovable property tax evasion.

Graph 3: Cultural / Societal Factors Contributing toward Immovable Property Tax Evasion
Taxes

*Strongly Agree

Lack of Education

Perceived Corruption

Lack of Trust in Government

-
70% 72% 74% 76% 78% 80% 82% 84% 86%

The results of the framework analysis indicate that a majority of the participants argue that cultural and
societal factors contributing toward immovable property tax evasion are lack of education, perceived
corruption, and lack of trust in government. The cultural and societal factors contributing toward immovable
property tax evasion cases withdrawn from the framework analysis is highlighted in Figure 3.

Figure 3: Cultural and Societal Factors Contributing toward Immovable Property Tax Evasion

_,Lack of Trust in
Government

-y Lack of Education

Cultural / Societal Factors Lack of Civic

IP Tax Evasion
Contributing toward IPT Responsibility

-* eeied Corruption
Source: Framework Analysis in Nvivo 24

A research participant believes that the main barrier impeding adherence to immovable property tax is the
lack of trust on government. The distribution and usage of taxpayers' contributions towards community
development and public services continue to be subjects of lack of trust on government among taxpayers. The
establishment of transparent governance is crucial in order to cultivate compliance and guarantee the
efficient use of accumulated assets for the advancement of society.

Identification and Investigation of IP Tax Evasion Cases

The results obtained from the interview sessions conducted with the potential interviewees have shown
instances of immovable property tax evasion that have been investigated and identified. The data provide
valuable insights into how the NRD investigates and identifies instances of IP tax evasion. The interviewees
have argued that the NRD primarily use property inspection and financial audits as means to ascertain
instances of immovable property tax evasion. The above mentioned two cases would be broadly discussed in
proceeding discussion as highlighted in Table 4.

755
[Link]
 Table 4: Identification and Investigation of Immovable Property Tax Evasion Cases

Whistleblower Programs 80% 20% 0% 0% 0%

Property Inspections 0% 0% 0% 10% 90%

Financial Audits 0% 0% 0% 15% 85%
Tax Amnesty Programs 75% 10% 15% 0% 0%

Surveillance 80% 15% 5% 0% 0%

Source: Interviews Conducted with the Participants (2023)

The principal method used by the NRD to detect and examine the majority of tax evasion cases is property
inspection, as shown by 90% of the participants expressing strong agreement during the interviews. The
participants argue that property inspections play a crucial role in the identification of tax evasion cases and
the enforcement of tax legislation by the NRD. However, 10% of the participants argue that NRD utilizes
property inspection tactics for the identification and investigation of tax evasion cases. The participants argue
about the significance of this approach within the broader tax enforcement strategy and being quite useful for
identification of tax evasion cases. The result of the study is supported by Tawheed (2022), Miskam (2013),
and Groenland and Veldhoven (1983).
The NRD use financial audits as second method to detect and examine the majority of tax evasion instances,
with 85% of the participants strongly agreeing during interviews. The participants argue that financial audits
play a vital role in the NRD examination of taxpayers' financial records, identification of inconsistencies, and
enforcement of tax legislation. However, 15% of respondents agree aboutthe use of financial auditprocedures
by the NRD to detect and examine instances of tax evasion. In precise, the NRD has two approaches for
identifying the tax evasion case including the financial audits and financial audits. However, the participants
argued there is need for a significant approach that lead us to the efficient detection of immovable property
tax evasion cases. The findings of this factor is in line with the Gupta (2007), and Richardson (2006). Graph
13 represents the approaches for the identification and investigations of IP tax evasion cases as highlighted
below.

Graph 4: Identification and Investigation of IP Tax Evasion Cases

U Strongly Agree

Property Inspections

Financial Audits
-

82% 83% 84% 85% 86% 87% 88% 89% 90%

The results of the framework analysis indicate that a majority of the participants argue that approaches for
identification and investigation of IP tax evasion cases include financial audits and property inspection. The
identification and investigation of immovable property tax evasion cases concluded from the framework

756
[Link]
analysis are highlighted in below Figure 4.

Figure 4: Identification and Investigation of Immovable Property Tax Evasion Cases

Property Inspection

Financial Audits
Source: Framework Analysis in Nvivo 24

A participant of the study aguetha

A paticpan argue
ofthestuy that fiancal
financial audits
udis adand property
popety inspections
nspections play a crucial role in the
detection and
and exposure of instances
instances of tax evasion. Nevertheless, we must recognize their
their constraints. The
oftax
intricate nature of tax evasion on on immovable
immovable property
property necessitates
necessitates aa wide
wide range
range of
ofinvestigation
investigation techniques.
techniques.
In successfully address this widespread
In order to successfully problem, it is crucial to engage
widespread problem, engage in innovation and
in innovation and include
methodologies.
novel methodologies.

5. Conclusions and Discussion

This study examines tax evasion practices of immovable property tax collection in Jalalabad district
immovable property district of
Nangarhar
Nangarhar province.
province. The
The qualitative research approach
qualitative research approach hashas adopted
adopted inin this research study
this research studyand
and the area ofthe
of the
study is Jalalabad district The sample size for our study is 20 prospective
study is Jalalabad district. The sample size for our study is 20 prospective respondents. respondents. There are no clear
selecting the sample
criteria for selecting sampl te size threshold level in
ithreshold in the qualitative research. Purposive sampling is used
collection of
for collection of the data. The reason behind using this this sample
sample technique is that that purposive
purposive sampling
sampling can be
more realistic than
than randomization in terms of oftime, effort
time, effort and cost needed in finding
finding prospective informants
prospective
thatcanhelp
that determine the problems, challenges,
can help us to determine challenges, and
andgrowth prospects of
growth prospects oftax collection. Therefore,
tax collection. Therefore, this
this
samplingtechnique
sampling technique has used for
for this study.
study. The
The sample unitofthe
unit of the study
study is directors ofNRD,
of NRD, deputy directors
directors
of NRD, property tax collectors, and senior
senior tax administrator.
administrator.
The findings of the study demonstrate that that the
the common
common factors
factors of
of IPT
IPT tax
tax evasion
evasion include
include inadequate
inadequate
regulation, ineffective
regulation, ineffective enforcement
enforcement of of reporting
reporting standards,
standards, lack
lack of
of ownership
ownership information, bribery and
information, bribery and
underground economy, false property
corruption, the underground property information, transactions.
information, and illegal property transactions.
Identically,
Identically, the
the interviews with thethe potential interviewees
interviewees have
have shown that that there are several cultural and and
sociological reasons that contribute to the the avoidance of of immovable property tax.
immovable property tax. Immovable
Immovable property
property tax
tax
evasion isis influenced
influenced by several
several cultural
cultural and socioeconomic
socioeconomic issues that include limited access to education,
limited access to education,
perceived instances
perceived instances of of corruption,
corruption, and
and aa lack
lack of
of faith in governmental
governmental institutions.
institutions. Eventually,
Eventually, the data
provide valuable
provide valuable insights
insights into
into how
how the
the NRD
NRD investigates
investigates and identifies instances
and identifies instances of IP tax evasion.
evasion. The
interviewees havehave argued that the NRD primarily
primarily use property inspection and and financial audits as means to
financial audits to
instances of
ascertain instances ofimmovable
immovable property tax evasion.
evasion.

Recommendations/Proposed Solution
Recommendations/Proposed Solution
1. Develop and enforce stricter laws and regulations governing the declaration and payment of
immovable property taxes. Introduce severe penalties for non-compliance, including fines, asset
seizures, and legal actions. Additionally, establish specialized tax courts or tribunals to expedite tax-
related cases, ensuring swift and fair adjudication.

2. Enhance the accuracy and comprehensiveness of property registration databases. Implement a

centralized, digital property registry that links property ownership records with tax obligations.
Encourage mandatory registration of all immovable properties, coupled with regular audits and
cross -checks against physical property inspections.

3. Educate the public on the importance of paying property taxes and the benefits it brings to the
community. Launch nationwide awareness campaigns, using various media channels, to inform
property owners of their tax obligations and the consequences of evasion. Additionally, publish tax
collection data and use of revenue in public services to foster trust and compliance.
757
[Link]
 4. Improve the capacity of tax authorities to effectively administer and collect property taxes. Provide
training and resources to tax officials to improve their skills in tax collection, property valuation, and
audit practices. Introduce technology solutions like Geographic Information Systems (GIS) to better
assess and monitor properties, ensuring accurate tax assessments.

5. Encourage voluntary compliance by offering incentives to property owners. Implement a system of

tax deductions or subsidies for timely and full payment of property taxes. Offer amnesty programs
for those who disclose previously undeclared properties, allowing them to settle past dues with
reduced penalties.

References
[1] Atilola, M. I., Ismail, A., Achu, K., & Bujang, A. A. (2019). An evaluation of factors causing variance in
property assessment. Planning Malaysia, 17(1), 82-93.
[Link]
[2] Azalina, N., Rahman, Y. A., Senawi, A., Haizam, M., Saraf, M., Fairuz, S., & Pin, C. (2021). Investigation
of Impediment Factors in Property Tax Revaluation Practices Housing and Local Government
Training Institute Ministry of Housing and Local Government, Malaysia. Journal of the Malaysian
Institute ofPlanners, 19(2021), 150-159.
[3] Bahl, R. (2004). Reaching the Hardest to Tax: Consequences and Possibilities (pp. 337-354).
[Link]
[4] Bird, R. M., Martinez-Vazquez, J., & Torgler, B. (2008). Tax Effort in Developing Countries and High
Income Countries: The Impact of Corruption, Voice and Accountability. Economic Analysis and
Policy, 38(1), 55-71. [Link]
[5] Bird, R. M., & Slack, E. (2004). Land and Property Taxation in 25 Countries: A comparative review.
International Handbook of Land and Property Taxation, 4(2), 19-56.
[Link]
[6] Braun, V., & Clarke, V. (2006). Using Thematic Analysis in Psychology. Qualitative Research in
Psychology, 3(2), 77-101. [Link]
[7] Dalsgaard, T. (2000). The Tax System in Mexico: A Need for Strengthening the Revenue-Raising
Capacity. OECD, 27-31. [Link]
[8] Datta, T. K. (2017). Effect of Green Technology Investment on a Production-Inventory System with
Carbon Tax. Advances in Operations Research, 2017, 12. [Link]
[9] Fischel, W. A. (2013). Fiscal Zoning and Economists' Views of the Property Tax.
[10]Gallagher, M. (n.d.). Domestic Resources Mobilization Case Study: Afghanistan.
[Link]
[11]Glaeser, E. L. (1996). The Incentive Effects of Property Taxes on Local Governments*. Pubfic Choice,
89(111), 93-111.
[12]Groenland, E. A. G., & Van Veldhoven, G. M. (1983). Tax Evasion Behavior: A Psychological
Framework *. Journal of Economic Psychology, 3(1983), 129-144.
[13]Herve Coverllec. (2014). Action Nets for Waste Prevention. InternationalJournalofEconomics, 5,
100-111.
[14]Kayranto, A. K. (2023). Determinants of Tax Evasion in South Omo Zone Revenue and Custom
Authority. Research Journal of Finance and Accounting [Link] ISSN, 12(5), 2021.
[Link]
[15]Mathur, 0. P., Thakur, D., Rajadhyaksha, N., Bahl, R. W., Mathur, 0., Prakash, ;, Thakur, D.;,
&

Rajadhyaksha, N.; (2009). Urban Property Tax Potential in India Urban Property Tax Potential in
India Recommended Citation Recommended Citation.
[Link]
[16]Mccluskey, W. J., & Franzsen, R. C. D. (2001). Land Value Taxation: A Case Study Approach Lincoln
Institute Product Code: WP01WM1.
[17]Miskam, M., Noor, R. M., Omar, N., &Aziz, R. A. (2013). Determinants of Tax Evasion on Imported
Vehicles. Procedia Economics and Finance, 7(2013), 205-212. [Link]

758
[Link]
 5671(13)00236-0
[18]Mohammed, H., & Tangl, A. (2024). Taxation Perspectives: Analyzing the Factors behind Viewing
Taxes as Punishment-A Comprehensive Study of Taxes as Service or Strain. Journal of Risk and
Financial Management, 17(1). [Link]
[19]Norregaard, J., Perry, V., & Keen, M. (2013). Taxing Immovable Property Revenue Potential and
Implementation Challenges; by John Norregaard; IMF Working Paper 13/129; May 1, 2013.
[20]Nyabwengi, L., K'akumu, 0. A., & Kimani, M. (2020). Challenges of County Government Property
Taxation in Nairobi City. AfricaHabitatReviewJournal, 14(2).
[Link]
[21]OECD. (2014). Addressing the Tax Challenges of the Digital Economy. OECD.
[Link]
[22]Palmon, 0., & Smith, B. A. (1998). Confirmations and Contradictions New Evidence on Property Tax
Capitalization. Journal of Political Economy, 106(5), 1099-1110.
[23]Pita, L. L., & Modevi6, A. (2018). Analysis of Taxation of Property in Bosnia and Herzegovina. Central
European Public Administration Review, 16(2), 157-178.
[Link]
[24]Purwanto, P., & Indrawan, R. (2020). The Determinants of Tax Evasion in Directorate General of
Customs and Excise Jakarta. [Link],
[25]Richardson, G. (2006). Determinants of Tax Evasion: A Cross-Country Investigation. Journal of
International Accounting, Auditing and Taxation, 15(2), 150-169.
[Link]
[26]Ross, J. M., & Mughan, S. (2018). The Effect of Fiscal Illusion on Public Sector Financial
Management: Evidence from Local Government Property Assessment. Public Finance Review,
46(4), 635-664. [Link]
[27]Roy [Link], & Richard M. Bird. (2008). Tax Policy in Developing Countries: Looking Back -and
Forward. NationalTaxJournal, 61(2), 279301.
[28]Sahari, S. N., Samsudin, S., Bujang, A. A., Suratman, R., Rahman, M. S. A., & Jiram, W. R. A. (2020).
General Review on Malaysia Land Taxation. International Journal of Academic Research in
Business and Social Sciences, 10(3). [Link]
[29]Sen Gupta, A. (2007). Determinants of Tax Revenue Efforts in Developing Countries. In
International.
[30]Tawheed, Q., Wang, C., Rafiqee, N., Qaderi, K. B., Sharifi, M. S., & Halimy, M. S. (2022a). Investigation
on Corporate Tax Evasion Based on Random Selection Method-Taking Kabul City as an Example.
OpenAccessLibraryJournal, 09(10), 1-13. [Link]
[31]Tawheed, Q., Wang, C., Rafigee, N., Qaderi, K. B., Sharifi, M. S., & Halimy, M. S. (2022b). Investigation
on Corporate Tax Evasion Based on Random Selection Method-Taking Kabul City as an Example.
Open Access Library Journal, 09(10), 1-13. [Link]

759
[Link]