Mr Karzai said all officials would be required to declare their income
Afghan President Hamid Karzai has said that accounts of widespread corruption within his government are exaggerated and politically motivated.
Government figures, including relatives of Mr Karzai, have been accused of abusing their connections for profit.
Mr Karzai told a news conference every government employee would be required to publicly declare their income.
Meanwhile, President Barack Obama is to unveil a new US strategy in Afghanistan on Friday, White House officials said.
Mr Karzai said he earned $500 (£345) a month, had savings of $10,000 in a bank in Germany and had no assets.
"I also want to say that the total value of the jewellery in our house is about $10,000. I don't have a private car, a house or land and I haven't got any other sources of income."
Mr Karzai is expected to run for re-election in August but US-Afghan relations have taken a downturn as senior American officials have questioned the effectiveness and honesty of his government.
Earlier this month, Mr Karzai's businessman brother Mahmoud denied complaints that he was using the president to get favourable contracts.
President Karzai has also denied that he allows anyone to use his name to get contracts or deals.
"Foreigners have defamed Afghanistan so badly in terms of corruption. But it's not as serious as they think," he told reporters in Kabul on Thursday.
In January, Nato secretary general Jaap de Hoop Scheffer said corruption and inefficiency in Afghanistan were as much to blame as the Taleban insurgency for the country's instability.
"The government is not what they [foreigners] say. Some of the things they say is just political pressure on us, saying 'Karzai, follow us otherwise we will defame you'."
Afghans too have been critical of their authorities.
In a recent survey conducted for the BBC in Afghanistan, half of those polled said corruption among officials or the police had increased.
Mr Karzai said he was setting up a new anti-corruption department to create a more open government.
"I hope all the government employees and high-ranking officials will fill this form and register their property to show the public more transparency and an accountable government," he said.
In a separate statement, Mr Karzai revealed that Mr Obama had phoned to brief him on the details of the new US strategy for Afghanistan.
Mr Obama, says the BBC's Adam Brookes in Washington, has for some days now been reading the Afghan strategy review.
White House press secretary Robert Gibbs said the president was now "making calls and briefing members of Congress based on the conclusions of that review" and would give the details on Friday.