Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Tax Administration (P127807) EUROPE AND CENTRAL ASIA | Tajikistan | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2013 | Seq No: 11 | ARCHIVED on 30-Nov-2017 | ISR30437 | Implementing Agencies: Tax Committee, Ministry of Finance, Ministry of Finance Key Dates Key Project Dates Bank Approval Date:31-Oct-2012 Effectiveness Date:08-Feb-2013 Planned Mid Term Review Date:30-Jun-2015 Actual Mid-Term Review Date:04-Nov-2014 Original Closing Date:31-Dec-2017 Revised Closing Date:31-Dec-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The Project Development Objective (PDO) is to reform the tax administration to become more efficient and effective in collecting revenue, enhance the level of voluntary compliance, and improve the quality of taxpayer services. Specifically, the project aims to: (i) reduce the administrative cost of collecting revenue to make the Tax Committee a more efficient institution; (ii) strengthen theeffectiveness of the Tax Committee to fight tax evasion and reduce the size of the shadow economy; (iii) reduce contact between taxofficials and taxpayers to reduce avenues for corruption and create conditions for increased level of voluntary compliance; and (iv) provide good quality taxpayer services that would help reduce the compliance burden for taxpayers, thus improving the business environment and competitiveness. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Institutional development:(Cost $2.20 M) Operational development:(Cost $1.80 M) IT Infrastructure and system development:(Cost $12.40 M) Project Management:(Cost $1.60 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory 11/30/2017 Page 1 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions Component 1. Institutional Development The TC has terminated the contract with the consulting company assisting with implementing institutional development (QCBS-01). Institutional development includes reforms in four major areas: (i) organization, management and integrity; (ii) human resource management; (iii) training management capacity building; and (iv) implementation of the human resource management information system. The consultant submitted nine required reports, two of which were not accepted: those on integrity and organizational structure and monitoring and assessing the effectiveness of tax offices. To complete those two important reports, the TC has hired an individual consultant who has already submitted reports. It is expected that a new action plan on implementing recommendations provided in the report will be developed soon. Human Resources Management Information System (HRMIS). The work on the HRMIS system has been completed and the HRMIS system was launched on September 1st. Five days of training were given to key staff members and these trainers are training additional HR staff who will be working with the new system. The personnel offices within the TC are in the process of transferring the staff’s information from the old paper based system into the HRMIS – the objective is to complete this task by Jan 1, 2018 with the expectation that all personnel activities will be processed through the new system at that time. A contract for a year of extended support by one on-site resource has been signed with the vendor. Beyond warranty work, this will provide the TC supporters with additional training and will ensure that they can undertake all maintenance and development on the new system. Component 2. Operational Development Part of the reports required under this component have been delivered by consultants. Reports include analysis and recommendations for changes in the areas of tax policy analysis and revenue forecasting, internal audit and appeal, and taxpayer services. However, the majority of reports submitted by consultant (Ernst&Young) on taxpayers’ registration, tax audit, and enforced collection have not been approved by TC due to their poor quality. It is expected that TC will terminate the services of the current consulting firm and hire an individual consultant to complete the analysis and provide recommendations on changes on those important areas of tax administration. The criteria for inclusion of taxpayers in the Large Taxpayer Inspectorate (LTI) could be reviewed with a view to increasing that number. At the moment, there are about 300 taxpayers in the LTI. This is also reflected in the collection figures from the LTI which remain at about 46 percent of total collections whereas the target is 60 percent. The team was informed that collections from companies outside the LTI have grown over the years which is a good indication that a review of the criteria is in order such that other taxpayers which may have become large enough to be in the LTI are included. LTI may be able to manage about 500 taxpayers effectively. Call Center. Under Component-2, funding is provided to set-up a modern call centre with up to ten seats in the old training building. The contract for the supply and installation of the equipment for the call centre was signed in April 2017; fit-up of the ten seats in the new central contact center is being completed this month. The central call center is linked to two other satellite contact centers which are in the regions. The three centers back-up each other and will handle each other’s workload if an overflow situation occurs. TC reports that 12,263 hotline queries were answered in 2016, which is significantly higher than the 7,338 queries in 2015. Over one thousand Q&A questions have been constructed for use by the contact center staff. Staff training in the use of the new contact center software and in the operations of the contact centre will take place in the next two months. The new central contact centre is targeted to be operational on January 1, 2018. Component 3. IT Infrastructure Modernization The TC continues to expand its electronic service offerings providing an increasing electronic suite of services as an interim solution until the new IT System (Integrated Tax Management Software – ITMS) is introduced as part of this project. Recently they have added introduced an e-request facility for taxpayers to request their letter for certification of no arrears and the confirmation that they are registered with the TC. Due to the legal requirement that the letters be stamped and signed, taxpayers must still go to a TC office to obtain them – once this legal requirement is addressed it will be possible to issue the letters to taxpayers electronically. E-filing rates are now at 87.4% with 97.2% of all legal entities and 77.8% of the individual entrepreneurs filing their returns electronically. In addition, all patent applications are now processed by the central system now that all local offices have been linked into the network and scanners (for copies of their personal identification documents) have been installed. During a field visit to the Vahdat office, we confirmed that the office staff are reporting that the ICT system (and infrastructure like network access) continues to be stable. In addition we visited the e-filing help center within the office – the TC has standardized the operations of these centers in all their offices and they are providing significant service assistance which is contributing to the high e-filing rate that has been attained. 11/30/2017 Page 2 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) The reports of difficulties processing submissions during peak periods have been addressed, with the result that only a sporadic number of taxpayers indicate they encountered an issue with e-filing during peak periods. The TC is introducing a “post” terminal in areas without local offices that will allow taxpayer to pay their taxes using their debit cards and get information about their obligations. The retendered ITMS procurement is underway. The new bids were received on Oct 10th and seven (7) bids were received. The TC evaluation team is currently reviewing the technical specifications and participating in the bidder demonstrations of their proposed systems. The results of this 1st phase of the procurement are targeted to be completed by November 15th with the 2nd phase invitations to be issued on November 25th. The TC is currently targeting for notification of contract award by January 24, 2018; and the signing of the contract and receipt of guarantees by February 5, 2018. Procurement Procurement under the project is conducted in compliance with the applicable Procurement and Consultants Guidelines and provisions of the Financing Agreement. Procurement under the project is considered moderately satisfactory. Since the number of process available for post review is small, the mission decided to postpone conducting post review exercise until the next fiscal year. Financial Management The financial management arrangements at TC, including planning and budgeting, accounting, financial reporting, funds flow, internal controls and external audits, are considered to be overall adequate and acceptable to the Bank. A limited control review of sample transactions under the Project conducted during the mission indicated several mostly minor issues. The current project FM rating is Moderately Satisfactory. The FM Risk Rating for the Project has been updated in Portfolio and Risk Management System (Prima2). Based on the results of the current FM mission, the project’s FM risk remains as Moderate. The Overall Fiduciary Risk rating for the project has been discussed with the Bank procurement specialist assigned to the project, and as a result, the Overall Fiduciary Risk rating for the project remains Substantial. 11/30/2017 Page 3 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  High  High Sector Strategies and Policies  --  Substantial  Substantial Technical Design of Project or Program  --  Moderate  Moderate Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Substantial  Substantial Environment and Social  --  Low  Low Stakeholders  --  Substantial  Substantial Other  --  Substantial  Substantial Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Increase in Voluntary Compliance: the total number of active taxpayers (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 161,000.00 262,239.00 267,192.00 201,500.00 Date 30-Jun-2012 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDPDOTBL  Improved taxpayer service: average time to comply (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 226.00 209.00 209.00 180.00 Date 31-Dec-2011 01-May-2017 17-Nov-2017 31-Dec-2019 11/30/2017 Page 4 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) PHINDPDOTBL  Increased Efficiency: average tax revenue collected per tax official (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value TJS 2.1 million TJS 4.7 million TJS 3.9 million TJS 2.9 million Date 31-Dec-2011 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDPDOTBL  % of taxpayers legal entities filing electronically (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 90.40 97.20 70.00 PHINDPDOTBL  Amount of tax arrears as a percentage of total annual tax collection (excluding Barqi Tojik) (Percentage, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 13.80 8.10 9.60 10.00 PHINDPDOTBL  Share of revenue collected by Large Taxpayer Inspectorate (LTI) (Percentage, Custom Supplement) 11/30/2017 Page 5 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Baseline Actual (Previous) Actual (Current) End Target Value 43.60 44.10 46.10 60.00 PHINDPDOTBL  Enhanced Effectiveness: tax gap as measured by VAT productivity (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.37 0.38 0.40 0.42 Date 31-Dec-2011 30-Sep-2016 17-Nov-2016 31-Dec-2019 PHINDPDOTBL  Enhanced Effectiveness: tax gap as measured by CIT productivity (Number, Custom Supplement) Baseline Actual (Previous) Actual (Current) End Target Value 0.03 0.04 0.14 0.06 PHINDPDOTBL  Adjustment as a result of audit per auditor (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 184.00 754.90 597.40 280.00 Date 31-Dec-2011 01-May-2017 01-May-2017 31-Dec-2019 Overall Comments Intermediate Results Indicators 11/30/2017 Page 6 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) PHINDIRITBL  Component 1: Implementation of Human Resource Management Information System (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Human Resources Management Information System (HRMIS). The work on the HRMIS system has been completed and the HRMIS system was launched on September The contract for the 1st. Five days of training new HRMIS system were given to key staff was signed in August members and these 2016 and the staff of trainers are training the successful bidder additional HR staff who have completed will be working with the approximately 70 new system. The percent of the personnel offices within customization. TC staff the TC are in the have been significantly process of transferring involved in the the staff’s information customization and from the old paper indicate that they will based system into the be able to maintain the HRMIS – the objective is System fully Value No HRMIS available application once the to complete this task by operational vendor has completed Jan 1, 2018 with the their work and that they expectation that all will be able to apply personnel activities will updates to the base be processed through application (1C) as the new system at that they are released by time. the vendor. It is A contract for a year of expected that the new extended support by one HRMIS system will be on-site resource has deployed in late July been signed with the 2017 and be rolled out vendor. Beyond across the TC in warranty work, this will August. provide the TC supporters with additional training and will ensure that they can undertake all maintenance and development on the new system. Date 05-Sep-2012 01-May-2017 17-Nov-2017 01-Aug-2017 11/30/2017 Page 7 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) PHINDIRITBL  Component 1: Building training facilities (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Training Center in the Training Center in the Sughd Region has Sughd Region has been been equiped. equiped. The new building of The new building of Training Center in the Training center Value Training center not present Training Center in the Kulob Region is fully equipped Kulob Region is operational. Training operational. Training Center is Khorog will Center is Khorog will be be operational in end operational in end 2017. 2017. Date 05-Sep-2012 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDIRITBL  Component 1: Training strategy approved and implemented (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The consulting The consulting company company has helped has helped TC with Training TC with developing the developing the Training strategy and Training provided in ad hoc Training Strategy. It is Strategy. It is expected Value curriculum manner expected that the that the Strategy will be design Strategy will be adopted by the end developed adopted in mid 2017 2017 and later and later implemented. implemented. Date 05-Sep-2012 01-May-2017 17-Nov-2017 29-Dec-2017 PHINDIRITBL  Component 1: Organizational review, work force review, organizational restructuring, staff redeployment (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Organizational review, The new organizational The new organizational workforce structure was approved structure was approved review, Organizational plan for HQ Value by the Government on by the Government on organizational submitted to government July 2012 and currently July 2012 and currently restructuring is being implemented. is being implemented. and staff redeployment completed Date 05-Sep-2012 01-May-2017 17-Nov-2017 31-Dec-2019 11/30/2017 Page 8 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) PHINDIRITBL  Component 2: Amount of tax arrears as a percentage of total annual tax collection (excluding Barqi Tojik) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13.80 8.10 9.60 10.00 Date 31-Dec-2011 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDIRITBL  Component 2: Share of revenue collected by Large Taxpayer Inspectorate (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 48.00 44.10 46.10 60.00 Date 31-Dec-2011 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDIRITBL  Component 2: Percent of taxpayers legal entities filing electronically (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.05 90.40 97.20 70.00 Date 31-Dec-2011 01-May-2017 17-Nov-2017 31-Dec-2019 PHINDIRITBL  Component 2: Development of Call Center (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Funding is provided to Under Component-2, set-up a modern call funding is provided to center with up to ten set-up a modern call seats in the old training center with up to ten building. The contract seats in the old training for the supply and building. The contract for installation of the the supply and equipment for the call installation of the Call center Value Manual system available center was signed in equipment for the call operational April 2017 and it is center was signed in expected that the new April 2017; fit-up of the call center will be ten seats in the new operational later this central contact center is year. TC reports that being completed this 12,263 hotline queries month. The central call were answered in center is linked to two 11/30/2017 Page 9 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) 2016, which is other satellite contact significantly higher than centers which are in the the 7,338 queries in regions. The three 2015. It is expected centers back-up each that 1,000 other and will handle questions/responses each other’s workload if will be introduced into an overflow situation the system, which will occurs. TC reports that be functioning on 7/24 12,263 hotline queries basis. were answered in 2016, which is significantly higher than the 7,338 queries in 2015. Date 05-Sep-2012 01-May-2017 01-May-2017 31-Dec-2019 PHINDIRITBL  Component 3: Data Center established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The new Data Centers The new Data Centers (DC) became (DC) became operational in 2016 and operational in 2016 and all production services all production services are now hosted in the are now hosted in the primary data center in primary data center in Dushanbe. The TC Dushanbe. The TC maintains a small maintains a small monitoring staff in an monitoring staff in an office area attached to office area attached to the DC; all other the DC; all other development and development and maintenance activities maintenance activities occur from the IT occur from the IT teams’ teams’ offices in the offices in the Headquarters building. Headquarters building. Supports current legacy Data center Value The Disaster Recovery The Disaster Recovery system fully operational (DR) center in Khujand, (DR) center in Khujand, visited during the field visited during the field visit, is operational and visit, is operational and contains the disaster contains the disaster recovery data storage recovery data storage devices along with its devices along with its own operations staff own operations staff responsible for its responsible for its monitoring. The center monitoring. The center will be equipped with will be equipped with servers as part of the servers as part of the ITMS process and at ITMS process and at that time will be fully that time will be fully functional as a disaster functional as a disaster recovery center. recovery center. Date 05-Sep-2012 01-May-2017 17-Nov-2017 31-Dec-2019 11/30/2017 Page 10 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) PHINDIRITBL  Component 3: Implementation of Integrated Tax Management Information System (ITMIS) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The ITMIS procurement is being retendered. The original procurement only attracted four bidders and all were assessed as not meeting tender requirements. The tender document has been revised and The new bids were submitted to the Bank received on Oct 10th for No Objection in late and seven (7) bids were May. The revised received. The TC tender document evaluation team is relaxes the currently reviewing the requirement to provide technical specifications a COTS solution and and participating in the will now allow bidders bidder demonstrations of to propose a custom their proposed systems. built system that meets The results of this 1st the TC’s requirements. phase of the It is expected that the procurement are ITMS deployed Existing tax system has RFP will be published targeted to be Value and fully limited capacity by the end of June. completed by November operational This exact mechanism 15th with the 2nd phase for the international invitations to be issued tender is being on November 25th. The discussed with the TC; TC is currently targeting the TC had requested for notification of a two phase tendering contract award by process but due to time January 24, 2018; and constraints the Bank the signing of the has asked them to contract and receipt of consider using a one guarantees by February phase process with a 5, 2018. financial and technical evaluation. In a best case scenario, the TC plans to complete the tender evaluations by December 2017. The new system is targeted to be operational starting in March 2019 with the full system available by November 2019. Date 05-Sep-2012 01-May-2017 17-Nov-2017 02-Sep-2019 Overall Comments 11/30/2017 Page 11 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P127807 IDA-H8100 Effective USD 18.00 18.00 0.00 8.33 8.37 46% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P127807 IDA-H8100 Effective 31-Oct-2012 14-Nov-2012 08-Feb-2013 31-Dec-2017 31-Dec-2019 Cumulative Disbursements Restructuring History Level 2 Approved on 27-Feb-2017 11/30/2017 Page 12 of 13 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Tax Administration (P127807) Related Project(s) There are no related projects. 11/30/2017 Page 13 of 13 Public Disclosure Copy