The boy had been abducted from a bazaar in the district of Gereshk in the southern province of Helmand.
"(He) was brutally hanged and his body was found on Friday," an interior ministry statement said.
A senior ministry official said that the boy had been killed after his father, a police official, had refused demands from the Taliban to join the insurgency.
Taliban spokesman Yousuf Ahmadi rejected the accusation as propaganda.
In a similar incident in June last year, the Taliban reportedly hanged a seven-year-old boy in the same province, accusing him of spying for the government.
The Taliban have been waging a brutal campaign against the Western-backed government and NATO and Afghan forces since their hardline regime was overthrown in a US-led invasion in 2001.
Published 25 July 2011, 13:45 IST