A team of UN Sanctions experts said in its report to the UN Security Council that the Taliban raised USD 400 million in the year that ended in March 2012. Of this money, about USD 275 million went to Taliban leadership while USD 125 million was collected, spent or misappropriated at the local level. The main source of revenue for the militant group has been donations as well as extortion money collected from drug traffickers and the billions pumped into Afghanistan for development projects.
"The team understands Taliban funding as follows: Revenue raised from taxing the local economy serves primarily to support local operations and is only in a few cases channelled upwards," the report said.
"Revenue extorted from nationwide enterprises such as narcotics producers and traffickers, construction and trucking companies, mobile telephone operators, mining companies and aid and development projects goes to the Taliban Financial Commission which answers to the Taliban leadership," the report said, adding that donations are a "major" source of funding for the militia leaders.
Taliban also collects money from taxes, including a 2.5 per cent tax on wealth and 10 per cent tax on harvest, mostly on poppy cultivation. Taliban also taxes water and electricity supplies and other services in certain areas, acting like local administrators.
The report quoted Afghan officials as saying that Taliban earned about USD 100 million from poppy trade in 2011-12, a small amount given that the total market of the drug crop is estimated at between USD 3.6 billion and USD 4.0 billion.