The World Bank Tax Administration Modernization Project (P111942)

Transcription

1 Public Disclosure Authorized EUROPE AND CENTRAL ASIA Armenia Governance Global Practice IBRD/IDA Investment Project Financing FY 2013 Seq No: 11 ARCHIVED on 20-Apr-2018 ISR32167 Implementing Agencies: Government of Armenia, State Revenue Commitee Public Disclosure Authorized Key Dates Key Project Dates Bank Approval Date:03-Jul-2012 Planned Mid Term Review Date:18-Feb-2015 Original Closing Date:30-Apr-2016 Project Development Objectives Effectiveness Date:28-Dec-2012 Actual Mid-Term Review Date:18-Feb-2015 Revised Closing Date:30-Sep-2018 Public Disclosure Authorized Project Development Objective (from Project Appraisal Document) The Project development objective (PDO) is to modernize Armenia s tax administration to (i) increase voluntary tax compliance, (ii)reduce tax evasion, (iii) reduce compliance costs; and (iv) increase administrative efficiency. This objective will be achieved by: introducing modern, integrated information technology to support SRC operations; improving data exchange between the SRC and other agencies to enhance better risk management and targeting of compliance activities ( third party information ); reengineeringand automation of business processes to improve efficiency and effectiveness; and expanding egovernment, including e-filing and e-payments to lower the compliance burden for the private sector. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Public Disclosure Authorized Name Institutional Development:(Cost $2.20 M) Process Modernization and Compliance Management:(Cost $1.00 M) Infrastructure and System Modernization:(Cost $11.00 M) Project Management:(Cost $0.90 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Moderately Satisfactory 4/20/2018 Page 1 of 13

2 Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions The Tax Administration Modernization Project (TAMP) became effective on January 04, 2013 after parliamentary ratification of the financing agreement. The original project implementation period remained relatively short, with a closing date of April 30, 2016 (nearly 3.5 years to complete), compared to most other World Bank supported tax projects. On October 14, 2015 the Ministry of Finance of the Republic of Armenia sent a letter of request with a detailed justification to the World Bank to extend the project closing date till December 31, The Bank team prepared a Level 2 Restructuring package for the World Bank (WB) Management s review and approval. On November 4, 2015, Bank Management approved the request to extend the project closing date till December 31, Prior to October, 2015 Implementation Support Mission, the Bank team completed a Mid-Term Review (MTR) mission on February 12-20, The project was implemented in partnership with the USAID till December 2015 which was established under a Memorandum of Understanding (MoU) between the World Bank and the USAID on July 13, The Tax Reform Project (TRP) of USAID, through which the partnership between USAID and the WB was established to support the State Revenue Committee (SRC), closed on December 31, At present, the implementation progress remains moderately satisfactory. The project closing date was extended till September 30, 2018 at the request of the client. The most recent implementation support mission took place in March 2018 and the next implementation support mission is tentatively scheduled to take place in June /20/2018 Page 2 of 13

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6 Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance -- Moderate Moderate Macroeconomic -- Substantial Substantial Sector Strategies and Policies -- Moderate Moderate Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Low Low Environment and Social -- Low Low Stakeholders -- Low Low Other Overall -- Moderate Moderate Results 4/20/2018 Page 6 of 13

7 Project Development Objective Indicators PHINDPDOTBL Average Adjustment result from audits (Amount(USD), Custom) Value Date 26-Apr Nov Mar Sep-2018 Comments The figure is reduced due to improvement in tax compliance in Armenia. PHINDPDOTBL Number of active VAT taxpayers (Number, Custom) Value 11, , , , Date 01-Jan Nov Mar Sep-2018 PHINDPDOTBL Number of active CIT taxpayers (Number, Custom) Value 28, , , , Date 01-Jan Nov Mar Sep-2018 Comments Data to update this indicator will be available after April, For 2012, from active CIT taxpayers, taxpayers were Simplified CIT report filers. Since the Law of the Republic of Armenia on Turnover Tax came into effect from 1 January 2013, the majority of Simplified CIT payers became Turnover Taxpayers, which leads to the decrease of the figure from year 2013 onward. 4/20/2018 Page 7 of 13

8 PHINDPDOTBL CIT productivity (Percentage, Custom) Value Comments Data for 2017 to update this indicator will be available only after April PHINDPDOTBL Ratio of Revenue collected to SRC operating costs (Number, Custom) Value Comments SRC was restructured in 2017 and during this process 500 employees were laid off who received 323 million AMD as severance pay. This was a major reason for this one-time increase in operating cost of the SRC. PHINDPDOTBL Perception of taxpayers regarding level of professionalism and honesty in tax administration as measured by biannualsurveys (differentiated by gender) (Percentage, Custom) Value Overall Comments The initial assessment was conducted by USAID at the start of the project and USADI ran out of funds to do a follow up survey. However, SRC has agreed to conduct a follow-up survey before the project closure and will continue to conduct a similar assessment each year. This will put in place a requirement to conduct such assessments on a regular basis. 4/20/2018 Page 8 of 13

9 PHINDIRITBL PHINDIRITBL PHINDIRITBL Intermediate Results Indicators Number of tax inspectors trained (differentiated by gender). (Days, Custom) Value , , , Number of tax inspectorates (Number, Custom) Value Comments As a result of recent SRC restructuring in 2017, currently there are only 2 tax inspectorates (centralized) - one is for large and medium taxpayers and the other one is for small taxpayers with its regional offices in the RoA Marzes (regions). This is an organizational improvement leading to significant efficiency gains. SRC adopted modernized organizational structure, based on workflow analysis (Text, Custom) Value Current SRC structure is based territorial structure, based on face-face interactions with clients SRC, which was merged with MoF, was separated again in March 2016 and a new Chairman was appointed. Currently besides Business to Government (B2G) and G2B, SRC is providing B2B and B2C (customers) services electronically. Most of the services are provided electronically (96.5%). SRC Senior Management, including the Chairman, was changed again in October SRC, which was merged with MoF, was separated again in March 2016 and a new Chairman was appointed. Currently besides Business to Government (B2G) and G2B, SRC is providing B2B and B2C (customers) services electronically. Most of the services are provided electronically (96.5%). SRC Senior Management, including the Chairman, was changed again in October Segmented, functional organization adopted. 4/20/2018 Page 9 of 13

10 PHINDIRITBL PHINDIRITBL Provision and Installation of Equipment and Furniture for Training Institute (Text, Custom) Value Outdated equipment and furniture deployed in training institute Cost estimates have been completed for Video Conferencing System for Training Centers. The requirements for the Training Center in Dilijan have been removed. Finalize technical specifications and proceed with ITQ (Invitation to Quotation shopping method). This task is progressing well and no anticipated delays. SRC/FFPMC have received 3 bids which were substantially higher than the proposed estimate. FFPMC has requested WB s no objection to rejecting all bids. WB team requested further information before granting the no objection. Procurement method agreed is ITQ (Invitation to Quotation shopping method). WB provided no objection on March 16, 2018, upon receiving the requested information from the Project Manager. This activity will be completed before September 30, New equipment and furniture deployed Service centers established (Yes/No, Custom) Value N Y Y Y 4/20/2018 Page 10 of 13

11 PHINDIRITBL PHINDIRITBL PHINDIRITBL PHINDIRITBL Percentage of total tax returns filed electronically (Percentage, Custom) Value Time to prepare and pay taxes (Hours, Custom) Value Disaster Recovery Center Operational (Yes/No, Custom) Value N Y Y Y Modern Core IT System Established and Operational (monitored by sub-indicators:(a):data Processing Center Operational(b):Data Warehouse Operational(c): HRMIS Operational(d): IT Security and Access Man (Number, Custom) Value Comments All are complete except HRMIS. However, as indicated in the Aide Memoire of November 2017 mission (under Key Issues ), funds allocated to HRMIS implementation were reallocated to further strengthen core SRC functions such as Tax Audit Case Management System, Network Infrastructure of SRC, etc. November 2017 Aide memoire included the following on HRMIS: HRMIS. Government of Armenia has decided to launch a government-wide, comprehensive Human Resource Management Information System (HRMIS) platform supported by the Presidential Order NK263A. Hence, the HRMIS, developed with USAID support under TAMP, 4/20/2018 Page 11 of 13

12 PHINDIRITBL becomes redundant. The TTLs met with the Deputy Prime Minister - who leads this new initiative - to receive further information/guidance on this reform initiative. The Deputy PM concurred with the SRC request to reallocate the resources elsewhere to further strengthen some of the core functions of the SRC (for example, tax audit came management system, network infrastructure of SRC). Bank team agrees with the request to cancel HRMIS and support the reallocation of funds to critical tax functions which will further enhance its IT/administrative capacities. Network Capacity and IP Telephony operational (Yes/No, Custom) Value N Y Y Y Overall Comments Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P IDA Effective USD % Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P IDA Effective 03-Jul Jul Dec Apr Sep-2018 Cumulative Disbursements 4/20/2018 Page 12 of 13

13 Restructuring History Level 2 Approved on 10-Mar-2014,Level 2 Approved on 04-Nov-2015,Level 2 Approved on 23-Mar-2018 Related Project(s) There are no related projects. 4/20/2018 Page 13 of 13