Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) Revenue Administration Modernization Project (P130202) EUROPE AND CENTRAL ASIA | Romania | Governance Global Practice | IBRD/IDA | Specific Investment Loan | FY 2013 | Seq No: 5 | ARCHIVED on 07-Aug-2015 | ISR20327 | Implementing Agencies: National Agency for Fiscal Administration (NAFA) Key Dates Key Project Dates Board Approval date:26-Apr-2013 Effectiveness Date:09-Aug-2013 Planned Mid Term Review Date:21-Mar-2016 Actual Mid-Term Review Date:-- Original Closing Date:31-Mar-2019 Revised Closing Date:31-Mar-2019 Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objectives of the project are (i) to increase effectiveness and efficiency in collection of taxes and social contributions; (ii) to increase tax compliance; and (iii) to reduce the burden on taxpayers to comply. Has the Project Development Objective been changed since Board Approval of the Project Objective? No PHRPDODEL Components Name Institutional Development:(Cost $9.00 M) Increasing Operational Effectiveness and Efficiency:(Cost $75.69 M) Taxpayer Services and Corporate Communications:(Cost $3.83 M) Project Coordination and Management:(Cost $3.31 M) Institutional Development:(Cost $9.00 M) Increasing Operational Effectiveness and Efficiency:(Cost $75.69 M) Taxpayer Services and Corporate Communications:(Cost $3.83 M) Project Coordination and Management:(Cost $3.31 M) Overall Ratings Name Previous Rating Current Rating 8/7/2015 Page 1 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Unsatisfactory  Moderately Unsatisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions The project has started to show progress and has already awarded a significant number of contracts that will speed up its implementation. Still disbursements remain low reflecting slower implementation than expected. The National Agency for Fiscal Administration (NAFA) has continued with the implementation of its organizational restructuring that included the upgrading of the Large Taxpayers Office (LTO) as well as the establishment of Medium Taxpayers Offices (MTOs) at the regional level, even though full implementation is still pending and subject to confirmation of appropriate alignment with best EU practices. They have also started implementation of the Change Management Strategy that will further help integrate efforts already deployed in the many areas of the organization. There are still some challenges NAFA needs to address to further consolidate project implementation among which a successful completion of NAFA reorganization is considered critical for the modernization intended under the project. However, NAFA management has begun to back away from this commitment despite a formal commitment from the Ministry of Finance at the start of the project. The Country Manager raised this issue with the Minister of Finance during a recent meeting. The team will continue to push for this important reorganization and will monitor the situation closely. Special attention to the project integration consultancy that is already under implementation is also very important together with the strengthening of ICT management related functions that will become critical for successful implementation of the new Revenue Management System (RMS). 8/7/2015 Page 2 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance  --  Substantial  Substantial Macroeconomic  --  Substantial  Substantial Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  Substantial Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Substantial  Substantial Other  --  --  -- Overall  --  Substantial  Substantial Results Project Development Objective Indicators PHINDPDOTBL  Effectiveness in revenue collection measured as the rate of tax arrears (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 40.00 41.24 41.24 50.00 Date 31-Jan-2012 31-Dec-2014 31-Dec-2014 31-Dec-2018 PHINDPDOTBL  Effectiveness in revenue collection as measured by the productivity rate of VAT and CIT (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target VAT 31.44%, CIT VAT 46%, PIT Value VAT 35.8%, PIT 11.9% VAT 29.9%, PIT 13.2% 11.30% 21% Date 31-Dec-2012 31-Dec-2014 31-May-2015 31-Dec-2018 8/7/2015 Page 3 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) PHINDPDOTBL  Efficiency in revenue collection measured as the revenue collected per NAFA staff (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6309.00 7328.20 7328.20 9656.00 Date 31-Dec-2012 31-Dec-2014 31-Dec-2014 31-Dec-2018 PHINDPDOTBL  Tax Gap for VAT, CIT, and PIT (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -10.00 Date 31-Dec-2014 -- -- 31-Dec-2018 Comments Having recently taken over as TTL of this project, I notice that the baseline indicator for the tax gap has not been estimated or calculated. The team initiated a dialogue with the IMF FAD mission that visited Bucharest on July 27th 2015. There is a possibility that the IMF will take on this task. We await the IMF mission's formal report. In case they are not going to take on this task we will request that the PIU makes an arrangement with local researchers to estimate the current tax gap. PHINDPDOTBL  Compliance cost as the average time for preparation of tax returns for corporate taxpayers (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 222.00 200.00 159.00 176.00 Date 31-Dec-2012 31-Dec-2014 31-May-2015 31-Dec-2018 Overall Comments Intermediate Results Indicators 8/7/2015 Page 4 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) PHINDIRITBL  Comp 1-Instl Devt: Estimated tax gap is calculated annually (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No -- -- Yes Date 31-Dec-2012 -- -- 31-Dec-2018 PHINDIRITBL  Comp 1-Instl Devt: Case management tools implemented for managing legal and appeals processes (Yes/No, Custom) Baseline Actual (Previous) Actual (Current) End Target Value N -- -- Y Date 31-Dec-2012 -- -- 31-Dec-2018 PHINDIRITBL  Comp 1- Instl Devt: NAFA staff’s level of satisfaction with new skills and ability to apply them for better performance (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- 10.00 Date -- -- -- 31-Dec-2018 PHINDIRITBL  Comp 2-Increasing Effectiveness & Efficiency: Yield per audit of firms and High-wealth individuals (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Firms: RON Firms: RON 2372 3600 Value -- -- HWI: To be developed HWI: Increase of 25% Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 31-Dec-2018 8/7/2015 Page 5 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) PHINDIRITBL  Comp 2-Increasing Effectiveness & Efficiency: Payment compliance rate for VAT, PIT, Social Contributions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target VAT: 78.5% Increase to PIT: 81.5% VAT:83.5% Value -- -- SC: 76.5% PIT:86.0% SC: 76.5% SC:82.5% Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 31-Dec-2018 PHINDIRITBL  Comp 2-Increasing Oprtnl Effectiveness & Efficiency: Average time required to settle dispute resolution (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 88.00 88.00 45.00 Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 31-Dec-2018 PHINDIRITBL  Comp 2-Increasing Oprtnl Effectiveness & Efficiency: Cost of revenue collection (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1.1% -- -- 0.9% Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Ratio of NAFA staff in Taxpayer Services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.00 2.60 2.60 10.00 Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 30-Sep-2018 8/7/2015 Page 6 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Electronic filing rate by large and medium size firms (legal persons) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 95.00 95.80 95.80 98.00 Date 31-Dec-2012 31-Dec-2013 31-Dec-2013 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Taxpayers’ satisfaction with NAFA’s integrity (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Increase by Value -- -- -- 15% Date -- -- -- 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Taxpayers’ satisfaction with NAFA’s quality of taxpayers services (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Increase by Value -- -- -- 15% Date -- -- -- 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Taxpayer perception of the time required to comply with tax procedures (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- Reduce by 20% Date -- -- -- 31-Dec-2013 Overall Comments Many of the intermediate indicators have not been measured recently. The Bank team will work with NAFA staff to ensure that a plan is put in place to measure as many of these indicators as possible prior to the mid-term review in March 2016. 8/7/2015 Page 7 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P130202 IBRD-82610 Effective USD 91.80 91.80 0.00 4.23 86.87 5% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P130202 IBRD-82610 Effective 26-Apr-2013 08-May-2013 09-Aug-2013 31-Mar-2019 31-Mar-2019 Cumulative Disbursements Restructuring History There has been no restructuring to date. Related Project(s) 8/7/2015 Page 8 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) There are no related projects. 8/7/2015 Page 9 of 9 Public Disclosure Copy