The Islamist group has also taken hundreds of millions of dollars from the billions pumped into Afghanistan for development projects, according to the report released this week by UN sanctions experts to the Security Council.
The experts estimated that Taliban raised $400 million in the 12 months up to March. About $275 million went to the Taliban leadership while $125 million was spent or misappropriated at the local level.
“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,” said the report.
The experts said donations are a “major” source of funding which also go to militia leaders.
The report quoted estimates by the NATO-led International Security Assistance Force (ISAF) that militia attacks cost between $100 million and $155 million a year to stage while the rest goes to maintaining the insurgency.
“Since 2006 the Taliban have managed to finance an ever-increasing number of attacks, reflecting a year-on-year increase in income.”
The Taliban use traditional taxes: a 10 percent tax on harvest and a 2.5 percent tax on wealth.
The harvest tax, much of it from poppy cultivation, is the “main source” of income, the report said. But the Taliban also taxes water and electricity supplies and other services.
“In some areas they collect a 10 percent tax from local shopkeepers and other small businesses,” said the report, which added that the militia acts much like a local administration.
According to UN figures, the Taliban raised about $155 million in 2009 from the poppy trade. This included taxing opium farmers, taxing and protecting drug convoys, and taxing heroin laboratories. The militia also receive large donations from narcotics traders.
Afghan officials, quoted by the UN report, estimate that the Taliban earned about $100 million from the poppy economy in 2011-12. But the total drug crop is estimated at between $3.6 billion and $4.0 billion.
“This suggests that the Taliban do not make great efforts to exploit this potential source of revenue,” said the report.
The Taliban can finance the insurgency in the main poppy provinces of Helmand, Kandahar and Uruzgan but “the amount of money raised from the drug trade is insufficient to meet the cost of insurgent activity elsewhere,” it added.
The sanctions experts said the Taliban have made foreign development funds a “lucrative source”.
“Estimates of Taliban income from contracts funded by the United States and other overseas donors range from 10 percent to 20 percent of the total, usually by the Taliban agreeing protection money with the contractor or demanding a cut.”
An ISAF financial task force has estimated that the Taliban took $360 million over three years from a $2.16 billion contract awarded to an Afghan trucking company by the United States military, the report said.
“Although representing a fraction of the $31 billion worth of active United States contracts reviewed by the Task Force, this example shows how the Taliban are able to raise money from an Afghan economy distorted by and unable to absorb the huge amounts of money that have flowed into the country since 2001,” said the report.
The United States led an international force which toppled the Taliban government after the September 11, 2001 attacks. The foreign troops have started a withdrawal and handover to Afghan forces that is scheduled to be completed at the end of 2014.