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Last Updated: Tuesday, 20 May, 2003, 12:39 GMT 13:39 UK
Karzai wins tax showdown
Afghanistan's powerful regional governors have agreed to hand over hundreds of millions of dollars to the central government in a dispute over taxation.

Hamid Karzai
Karzai's rule beyond Kabul is shaky
The deal was reached at a meeting in Kabul called by President Karzai who had threatened to resign if he did not get his way.

Correspondents say the issue has been indicative of the problems the president has had in establishing his authority across the country.

The BBC's Kylie Morris in Kabul says the test now is to see if the agreement works in practice.

'Taxes must flow'

It is estimated that provincial governors have been withholding up to $500m in annual customs revenue from the central government.

Interior Minister Ali Ahmad Jalali told the BBC that all of the governors and ministers have now agreed that the revenues from the provinces should be sent to the central government.

Troops loyal to Herat warlord Ismail Khan
Some Afghan warlords have raised powerful armies

They also agreed that strategies to expand the authority of the central government should be implemented immediately.

Mr Jalali said the taxes would have to start to flow to stabilise the government.

If not, he said, other measures would be considered.

Our correspondent says President Karzai's move to summon all of the main players in Afghan politics to his palace for Tuesday's meeting was a risky strategy.

But it has, on paper at least, worked.

The governors arrived in Kabul in a flurry of four-wheel drive vehicles, even as Mr Karzai was threatening to call a loya jirga (grand assembly) if the governors failed to fall into line with him.


In a speech broadcast on state television on Sunday night, Mr Karzai said that day by day Afghans were becoming disillusioned with the government.

He accused some provinces of collecting state revenues for their own finances and armies, adding that peace could not survive under those conditions.

The president has expressed hope that by the end of week all provincial funds will become the funds of the central government.

He has also expressed dismay at continued factional fighting.

In the past week 17 people have died in fighting between local groups around the northern town of Mazar-e-Sharif.

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