Public Disclosure Copy. Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770)

Transcription

1 Public Disclosure Authorized SOUTH ASIA Bangladesh Public Sector Governance Global Practice IBRD/IDA Program-for-Results FY 2014 Seq No: 2 ARCHIVED on 19-Feb-2015 ISR17026 Implementing Agencies: National Board of Revenue Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Program Development Objectives Program Development Objective (from Program-for-Results Appraisal Document) The PDO is to improve revenue mobilization and transparency in the VAT administration. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Satisfactory Moderately Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The VAT Improvement Program (VIP or VAT Online Project) is about one year behind its original schedule. The progress toward the overall revenue raising objective is at risk given the delays in implementation. The main concerns are the delay to the implementation of the 2012 VAT Law and the progress with the procurement of the commercial off-the-shelf VAT administration software and the project management consultancy. These procurements have been retendered and should be completed by the first quarter of FY15/16, and potentially by end of June 2015 as per the VAT Online project team s implementation team. The program objective to raise transparency in the VAT administration is progressing and measures to improve the ease of finding information are needed to enhance compliance with the Right to Information Act There has been progress with implementation since the Bank s implementation support mission in November The Government approved a Technical Assistance Project Proforma (TAPP) on November 13, The TAPP is for a US$3 million project under the VIP, for activities related to supporting the implementation of the VAT Online Project; such as the hiring of an independent third party verification entity. Following TAPP approval, the VIP official signing ceremony of the Financing Agreement took place on December 7, The VIP was declared effective on January 11, The key decisions to get the VIP back on track are to re-launch the combined COTS, hardware and network in a two-stage process, which was launched on November 29, 2014; and the Project Management Consultancy whose terms of reference were advertised on January 11, For successful implementation of the project and achievement of the revenue raising targets it is important to a) keep on track with a VAT Law implementation schedule of July 2016; b) keep the critical procurements on track and in accordance with the Public Procurement Act and Rules and consistent with the measures agreed in the Project Appraisal Document and Program Action Plan; and c) improve the usability of the website and to merge the two websites available into one comprehensive and user friendly website. Page 1 of 11

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3 PHDLIPDOTBL Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA Effective XDR % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA Effective 09-May Dec Jan Jun Disbursement Linked Indicators (DLI) DLI 1.1: VAT Implementation Plan on Track (Text) Value Baseline 2012/13- VAT Implementation Plan approved by Minister of Finance Procurement of the COTS is in process. The DLI has not been met. The DLI has not been met. Procurement of combined software, hardware and data network package is in process. If the procurement process stays on track signing of the Page 3 of 11

4 PHDLIPDOTBL PHDLIPDOTBL PHDLIPDOTBL PHDLIPDOTBL contract with the vendor could be expected by the end of June 2015, as per the Project Team s plan, but is more likely in Quarter 1 of FY 15/16. The DLI has not yet been met. DLI 1.2: VAT Implementation Plan on Track (Text) Value Baseline 2012/13- VAT Implementation Plan approved by Minister of Finance Procurement of the PMC is in process. The DLI has not been met. The DLI has not been met. Procurement of the PMC is in process and signing of the contract with PMC could be expected by the end of June 2015, but is more likely in Quarter 1 of FY15/6. DLI 2: Number of registered active VAT taxpayers (thousands) (Number) Value Actual (Current)- No target is set until year 3. Baseline to be established in 2015/16 after the VAT online system is operationalized. DLI 3: Number of taxpayers who filed on-line (Number) Value Actual (Current)- No target is set until year 3. Baseline to be established in 2015/16 after the VAT online system is operationalized. DLI 4: Percent of VAT Large Taxpayer Unit taxpayers who paid on-line (Percentage) Value Page 4 of 11

5 PHDLIPDOTBL PHDLIPDOTBL Actual (Current)- No target is set until year 3. Baseline to be established in 2015/16 after the VAT online system is operationalized DLI 5- Greater transparency (Text) Value 75 The taxpayer satisfactory survey has been posted on the NBR website. The tax collection 2012/13 information has also been disclosed. The DLI has not been fully met. Date 12-Mar Jan-2015 While considerable new information has been posted on the VAT Wing website(s), a lot of information required under PAD consistent with the RTI Act remains missing. Moreover, there are issues with usability of the information, particularly as the NBR operates two separate websites both of which contain significant but not comprehensive information. The RTI Implementation Strategy for the VAT Wing, covering other aspects of the RTI Act 2009, was endorsed by the Project Director, and progress was being made to implement this (including the appointment and training of Designated Officers under the Act). Several implementation steps were agreed with the Project Implementation Unit to ensure full compliance with DLI5 Year 1 targets by June So the DLI has not been fully met. DLI 6- Fiduciary Actions (Text) Value 2012/13 Out of 11 NCB contracts, 3 are follwoing e-gp, which were floated on June 25, The procurement target (25 percent) for fudiiciary DLI has therefore been met. Quarterly fund utilization reports are due at the end of the quarter. The DLI has been partially achieved. No fund utilization report was submitted in the second quarter of FY 14 as three quarters fund for the program was released as per existing fund release procedures. In addition, the use of funds for the program started towards the end of the previous quarter and hence the issue of submission of utilization report did not arise. The next quarterly fund utilization report to Finance division will become due in April Results Page 5 of 11

6 Results Area Intermediate Results Area Project Development Objective Indicators PHINDPDOTBL VAT Tax-GDP Ratio (Percentage, Custom) Value Date 12-Mar Jul Jan Jun-2020 PHINDPDOTBL Compliance with the availability of information listed in the RTI rules and regulations (Percentage, Custom) Value Date 12-Mar Jul Jan Jun-2020 The PDO on greater transparency has been partially met. While considerable new information has been posted on the VAT Wing website(s), a lot of information required under the Program Appraisal Document (PAD) consistent with the RTI Act remains missing. Moreover, there are issues with usability of the information, particularly as the NBR operates two separate websites both of which contain significant but not comprehensive information. The RTI Implementation Strategy for the VAT Wing, covering other aspects of the RTI Act 2009, was endorsed by the Project Director, and progress was being made to implement this (including the appointment and training of Designated Officers under the RTI Act). Several implementation steps were agreed with the Project Implementation Unit to ensure full compliance with DLI5 Year 1 targets by June Overall The PDO on greater transparency has been partially met. While considerable new information has been posted on the VAT Wing website(s), a lot of information required under the Program Appraisal Document (PAD) consistent with the RTI Act remains missing. Moreover, there are issues with usability of the information, particularly as the NBR operates two separate websites both of which contain significant but not comprehensive information. The RTI Implementation Strategy for the VAT Wing, covering other aspects of the RTI Act 2009, was endorsed by the Project Director, and progress was being made to implement this (including the appointment and training of Designated Officers under the RTI Act). Several implementation steps were agreed with the Project Implementation Unit to ensure full compliance with DLI5 Year 1 targets by June Intermediate Results Indicators Page 6 of 11

7 Intermediate Results Indicator 1: VAT Implementation Plan on Track (Text, Custom) Value VAT Implementation Plan approved by Minister of Finance Procurement is in process Target has not been met. At least 60,000 VAT returns are processed per month Date 01-Jul Jul Jan Jun-2020 Procurement of combined software, hardware and data network package is in process. If the procurement process starts soon and abide by the deadlines set forth in the Bangladeshi Public Procurement Act, 2006 and Rules, 2008, signing of the contract with the COTS vendor could be expected by the end of June Target has not been met. Intermediate Results Indicator 2: New registered active VAT taxpayers (Number, Custom) Actual (Current)- Year 3 target. Not yet due; End Target- Baseline established for number of VAT active tax payers plus 30,000 in the last year. Intermediate Results Indicator 3: Value of VAT e-payments (Amount(USD), Custom) Actual (Current)- Year 3 target. Not yet due; End Target- Baseline: for value of VAT e-payment plus +20 percent in the last year Intermediate Results Indicator 4: Reduced VAT stop filers (Number, Custom) Page 7 of 11

8 Actual (Current)- Year 3 target. Not yet due; End Target- Baseline for number of VAT stop filers minus 20 percent in the last year Intermediate Results Indicator 5: Taxpayers file on-line (Number, Custom) Actual (current)- Year 3 target. Not yet due. End target- Baseline for number of VAT active on-line filers plus 10,000 in the last year. Intermediate Results Indicator 6: VAT Large Taxpayers who pay on-line (Percentage, Custom) Value Actual (current)- Year 3 target. Not yet due. End Target- Baseline for number of VAT active on-line filers plus 10,000 in the last year. Intermediate Results Indicator 7: Average time to process and issue tax refunds (Days, Custom) Actual (current)- Year 3 target. Not yet due; End Target- Baseline for number of VAT active on-line filers plus 10,000 in the last year Page 8 of 11

9 Intermediate Results Indicator 8: Hit rate of tax audits percentage of tax audits resulting in additional tax assessments (in a year) (Percentage, Custom) Actual (current)- Year 3 target. Not yet due; End Target- Baseline for percentage of tax audits resulting in additional tax assessments plus 15 percent. Intermediate Results Indicator 9: Lower taxpayer costs for complying with VAT (Amount(USD), Custom) Actual (current)- Year 3 target. Not yet due; End Target- Baseline for compliance cost minus 15 percent. Baseline to be established in Intermediate results Indicator 10. Greater transparency (Text, Custom) Value Information disclosed Year 1 target not met. The tax collected and the taxpayer satisfaction survey have both been disclosed. Much of the information required under the RTI Act is disclosed. But the website needs to be reorganized to make the information easier to find. The two websites need to be merged to one. Full compliance with RTI Act disclosure requirements. Tax collected disclosed; Taxpayer satisfaction survey disclosed; Processing and Contact center performance disclosed Page 9 of 11

10 Date 12-Mar Jul Jan Jun-2020 Much of the specific information required for year 1 with regard to the RTI Act has been disclosed, but considerable information remains missing, notably the VAT Wing s budget and all RTI details. A further issue is that information is not easy to find because the NBR operates two separate websites, neither of which has comprehensive information. Other usability issues include inconsistent use of Bangla/English and technical problems opening PDF files. With regard to additional performance related information to be disclosed by year 1, the VAT Wing has done well but again there are access/usability issues. Intermediate results Indicator 11. Greater taxpayer satisfaction with services (Percentage, Custom) Value Date 30-Jun Jul Jan Jun-2020 Baseline to be established based on 2016 taxpayer perception and compliance cost survey. Intermediate Results Indicator 12. Improved fiduciary management (Text, Custom) Value -- Out of 11 contracts, 3 are following egp that was floated in June. The target has been partially met. 75 percent of NCB contracts are done through e-gp. All significant audit objections resolved in 6 months. Submit quarterly fund utilization report to FD & complete fund release processes after each quarter. Date 12-Mar Jul Jan Jun-2020 No fund utilization report was submitted in the second quarter of FY 14 as three quarters fund for the program was released as per existing fund release procedures. In addition, the use of funds for the program started towards the end of the previous quarter and hence the issue of submission of utilization report did not arise. The next quarterly fund utilization report to Finance division will become due in April Page 10 of 11

11 Overall Page 11 of 11