The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) SOUTH ASIA | Pakistan | Governance Global Practice | Requesting Unit: SACPK | Responsible Unit: ESAG1 IBRD/IDA | Program-for-Results Financing | FY 2019 | Team Leader(s): Raymond Muhula, Akmal Minallah Seq No: 1 | ARCHIVED on 15-Oct-2019 | ISR38604 | Created by: Raymond Muhula on 18-Sep-2019 | Modified by: Pragya Shrestha on 10-Oct-2019 Program Development Objectives Program Development Objective (from Program Appraisal Document) To increase the collection of Khyber Pakhtunkhwa's own source revenues and improve the management of public resources Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO -- Satisfactory Overall Implementation Progress (IP) -- Satisfactory Implementation Status and Key Decisions The project was approved by the Board on June 13, 2019 and became effective on June 18, 2019. While there are ongoing activities in various part of the public sector related to the result indicators, it is too early to report any meaningful results at this stage. The World Bank team has continued to engage with the Government of Khyber Pakhtunkhwa counterparts to establish the various project implementation structures. At this point, the Government is moving at the right pace for this stage of program implementation, that is three months after approval. The Shared Services Unit, established to support program implementation is under preparation and the team comprising cross cutting specialists (Financial Management, Procurement, Monitoring and Evaluation, Contract Management, Environmental Safeguards and Social Safeguards) is expected to be notified by October 31, 2019. Recruitment of the Third-Party Verification Agent (TPVA) is underway. Once recruited, the TPVA will immediately commence the verification of the three prior results achieved before the Board approval, the verification is expected to be completed by December 23, 2019. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P162302 IDA-64210 Effective USD 118.00 118.00 0.00 11.99 106.17 10% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P162302 IDA-64210 Effective 13-Jun-2019 17-Jun-2019 18-Jun-2019 31-Dec-2024 31-Dec-2024 10/15/2019 Page 1 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Program Action Plan Develop annual internal audit plan and conduct internal audits of KPRA; KPITB; ETNCD; FD; PD&D and LGD in a Action Description manner and substance satisfactory to the Association Source DLI# Responsibility Timing Timing Value Status Fiduciary Systems FD Recurrent Yearly In Progress Completion Submission of annual internal audit plan and internal audit report to the Association Measurement Comments Conduct communication campaigns on tax compliance, TFCs and on the benefits of commercialization of government Action Description properties Source DLI# Responsibility Timing Timing Value Status FD, KPRA, ETNCD, Technical Recurrent Semi-Annually Not Yet Due BoR Completion At least two communication campaigns per year to be included in the Program Reports submitted by the PCU to the Measurement Association Comments All commitments entered in FMIS in four targeted provincial government departments (Communication and Works, Action Description Education, Health and Irrigation) Source DLI# Responsibility Timing Timing Value Status Technical P&DD Recurrent Continuous Not Yet Due Completion All commitments available in FMIS in the four targeted provincial government departments Measurement Comments Action Description Conduct infrastructure survey based on inclusion and equity for PATA and of former FATA districts Source DLI# Responsibility Timing Timing Value Status Environmental and Social P&DD Due Date 27-Dec-2019 Not Yet Due Systems Completion Survey report submitted to the Association Measurement Comments 10/15/2019 Page 2 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Action Description Adopt multi-year investment plan for former FATA districts Source DLI# Responsibility Timing Timing Value Status Environmental and Social P&DD Due Date 30-Jun-2022 Not Yet Due Systems Completion Investment plan notified by GoKP Measurement Comments At least 100 DDOs in participating departments, TMAs, and former FATA districts have PFM certification and FMIS Action Description training Source DLI# Responsibility Timing Timing Value Status Technical FD Due Date 30-Jun-2020 In Progress Completion List of DDOs certified in PFM and trained in FMIS submitted to the Association Measurement Comments Action Description Simplification of the tax system evidenced by the reduction of the number of OSR tax instruments Source DLI# Responsibility Timing Timing Value Status Technical FD Due Date 30-Dec-2020 Not Yet Due Completion Reduction in number of OSR tax instruments from 13 to 8 Measurement Comments Action Description Develop annual audit plan and conduct annual risk-based audit of selected provincial government departments Source DLI# Responsibility Timing Timing Value Status Technical KPRA Recurrent Yearly Not Yet Due Completion Submission of annual audit plan and annual audit report to the Association Measurement Comments Action Description Analyze impact of GSTS and property tax on women 10/15/2019 Page 3 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Source DLI# Responsibility Timing Timing Value Status Environmental and Social P&DD Due Date 30-Jun-2020 Not Yet Due Systems Completion Report with recommendations Measurement Comments 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 Moderate -- Moderate Institutional Capacity for Implementation and Sustainability Substantial -- Substantial Fiduciary Substantial -- Substantial Environment and Social Low -- Low Stakeholders Substantial -- Substantial Other -- -- -- Overall Substantial -- Substantial Results PDO Indicators by Objectives / Outcomes Increase in KP Own Source Revenue IN00745626 ►Increase in own source tax revenues (million) (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 99.40 -- 2.95 153.00 Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Available in PKR should be reported in US$ (million). Baseline is 14.30 (billion) or ( US$ 99.4 Comments million) as of May 31, 2019. 10/15/2019 Page 4 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Improved Cash Management IN00745625 ►Cash deposits held by Government in commercial banks (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target PKR 185.868 billion of government cash deposits Data not available for Value -- 0.00 in the commercial banks this reporting period (status: Jan. 2018) Date 31-Jan-2018 -- 02-Oct-2019 28-Jun-2024 This indicator aims to reduce the outstanding government departments’ cash deposits (for five departments: Law, Health, Higher Education, Elementary and Secondary Education, and Local Government) in the Comments commercial banks by PKR 5 billion in years 1-3 and by PKR 9.5 billion in years 4-5 so that these deposits go to zero and commercial bank accounts of these departments are closed. Improved Management of Public Investments IN00745627 ►Share of ADP funds spent on capital investment (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 47% -- 74% >65% Date 03-Jul-2017 -- 02-Oct-2019 28-Jun-2024 Year 1: Public investment* defined and ADP guidelines revised to focus on capital expenditures. *Public Comments investment for the purposes of this indicator corresponds to the 'capital expenditures' category in the IMF Government Finance Statistics 1986 (cash-based) economic classification of expenditures. Intermediate Results Indicators by Results Areas Efficient Revenue Mobilization IN00745628 ►Registered taxpayers who filed GSTS in previous year (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 51.00 -- 80.00 70.00 Date 30-Jun-2017 -- 02-Oct-2019 28-Jun-2024 Comments Percentage of taxpayers registered with KPRA who filed their returns in the previous fiscal year IN00745630 ►Database integration in tax administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target KP tax authorities have access to shared No linkages among KP No linkages among KP tax data with links to third tax authorities’ Value authorities’ databases or -- parties databases or with third- with third-parties (accessible with parties taxpayer CNIC/Name) Date 31-Dec-2018 -- 02-Oct-2019 28-Jun-2024 10/15/2019 Page 5 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Automated exchange of taxpayer data (by CNIC/STN) through shared Data Warehouse for the KPRA, Comments ETNCD, and BoR is in place; and KPRA has automated linkages with at least five third parties (e.g. FBR, NADRA, withholding agents such as commercial banks, telecom and utility companies). IN00745632 ►Business processes for tax administration simplified and harmonized (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 5 (litigation process) No harmonized Value No harmonized processes -- processes Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 There are currently no harmonized processes. This indicator aims at harmonizing five processes among the Comments three revenue authorities. Year 1: taxpayer registration process using CNIC/STN; Year 2: payments process; Year 3: monitoring of arrears; Year 4: taxpayer appeals processes; Year 5: litigation process. IN00745634 ►Taxpayer facilitation centers functional (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value None -- 2.00 12 TFCs Date 31-May-2019 -- 02-Oct-2019 01-Jul-2024 Comments Shared spaces for administering taxes IN00745635 ►Cities with updated UIPT surveys, valuations and digitized records (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No recent survey No recent survey conducted; partial conducted; partial Value -- 2 additional cities digitization of tax records digitization of tax in some cities. records in some cities. Date 31-May-2019 -- 02-Oct-2019 01-Jul-2024 Urban Immovable Property Tax records updated through surveys and digitized in 10 cities by year 5 (2 additional cities per year); UIPT surveys include GIS mapping of properties and updated valuations with Comments reference to market benchmarks. Baseline: No recent survey conducted; partial digitization of tax records in some cities. IN00745637 ►Revenue generation from public property (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No asset maps of Performance No asset maps of government-owned real framework and targets Value -- government-owned real estate. for the company set in estate. MoU with GoKP. Date 31-May-2019 -- 02-Oct-2019 01-Jul-2024 Comments Revenue generation from commercial use of underutilized government real estate assets Effective public resource management IN00745629 ►Cash management based on regular consolidation of cash balances and cash plans (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 10/15/2019 Page 6 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Monthly cash plans for four provincial government departments Cash management not Cash management not (Communication and based on regular based on regular Works, Elementary Value consolidation of cash -- consolidation of cash and Secondary balances and regular cash balances and regular Education, Health, plans. cash plans. Irrigation) prepared by respective departments and submitted to FD Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Cash Management Policy notified by FD; GoKP cash balances (Accounts 1, 2, 3, 4, 5; zero-balance accounts for revenue receipts) consolidated in the TSA through the SBP (except balances of public Comments accounts, endowment funds, and monies parked in courts as a result of disputes); Cash plans prepared by four provincial government departments (Communication and Works, Education, Health, Irrigation) and submitted to the FD. IN00745631 ►Sectors with public investment plans (cumulative) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 9.00 Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Number of sectors with public investment plans Comments IN00745633 ►ADP funds allocated to unapproved projects (except foreign project assistance) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target DLR 5.5: Allocated Allocated funds to funds to Unapproved unapproved projects are Projects have not 49% of total exceeded 20% of total Value ADP(excluding Foreign -- 125% ADP (excluding project assistance)in Foreign Project FY18. Assistance) in FY24 Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Percentage of ADP funds allocated to new projects that have not been approved by the competent authority (District Development Working Party, Provincial Development Working Party, Central Development Working Comments Party) except projects awaiting approval by ECNE*. *The Executive Committee of the National Economic Council (ECNEC) is the federal entity in charge of sanctioning public sector development schemes costing ˃ PKR 3 billion. IN00745636 ►E-Government functionality strengthened in selected government departments (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Implementation of e- archiving/indexing of Limited and uneven Limited and uneven government records in Value functionality of e- -- functionality of e- 7 targeted Government Government departments. 10/15/2019 Page 7 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 E-Government functionality strengthened in selected government departments Comments IN00745638 ►TMAs using FMIS to record transactions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Provided that the 30 TMAs continue to use NFMIS to record No NFMIS payments: NFMIS decentralization Value decentralization plan. -- 20 additional TMAs plan. have used the NFMIS to record payments throughout Year 5 Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Number of additional TMAs per year whose transactions are recorded in in the FMIS with an end target of 20 additional TMAs (50 TMAs total); recorded transactions should include all payments made according to Comments the object code of the Chart of Accounts/budget classification. Baseline/Prior Result: FMIS decentralization plan approved by GoKP (PR#3). Year 1: Access system tested. IN00745639 ►OBB departments with measurable gender KPIs, reporting number of females reached by their services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 -- 0.00 32.00 Date 31-May-2019 -- 02-Oct-2019 28-Jun-2024 Comments Percentage of OBB departments reporting number of women reached by their services IN00745640 ►Improved management of dedicated funds (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No reports currently No reports currently Annual consolidated Value published; No estimate of -- published; No estimate report for all KP Funds pension liabilities of pension liabilities published Date 31-May-2019 -- 02-Oct-2019 01-Jul-2024 Comments Public disclosure of annual reports on all KP funds Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Registered taxpayers who filed GSTS in previous year (Intermediate Outcome, 25,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) Value 51.00 -- 80.00 75.00 Date -- -- 04-Oct-2019 -- This data is from KPRA and is yet to be verified as part of the Third Party Verification process for purposes of Comments disbursement. 10/15/2019 Page 8 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) ►DLI 2 Database integration in tax administration (Intermediate Outcome, 10,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) No linkages among KP tax authorities’ databases or DLR 2.5: KP Tax with third parties Authorities have Data Warehouse Pilot in access to shared the Department of Science No linkages among KP data with links to Value and Technology and -- tax authorities’ databases third parties Information and or with third parties (accessible with Technology (ST&IT) taxpayer CNIC/Name) Date -- -- 04-Oct-2019 -- Database integration has not started. The Government has, however, notified the establishment of a committee to monitor revenue performance, an important first step in establishing inter-agency collaboration Comments which forms a strong strategic collaboration in other areas. ►DLI 3 Cities with updated UIPT surveys, valuations and digitized records (Intermediate Outcome, 15,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) No recent survey No recent survey conducted; partial conducted; partial Value -- 2 additional cities digitization of tax records in digitization of tax records some cities. in some cities. Date -- -- 04-Oct-2019 -- While a survey has not been carried out, there is continued support for this activity. The recently created Comments committee on revenue performance is expected to cover UIPT and other revenue types. ►DLI 4 Cash management based on regular consolidation of cash balances and cash plans (Intermediate Outcome, 20,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) DLR 4.6: Four Government Departments (Communication and Cash management not Cash management is still Works, Elementary based on regular not based on regular and Secondary Value consolidation of cash -- consolidation of cash Education, Health, balances and regular cash balances and regular cash Irrigation) have plans plans prepared monthly cash plans and submitted them to FD throughout Year 5 Date -- -- 04-Oct-2019 -- 10/15/2019 Page 9 of 10 The World Bank Implementation Status & Results Report Khyber Pakhtunkhwa Revenue Mobilization and Public Resource Management (P162302) Comments ►DLI 5 ADP funds allocated to unapproved projects (excluding foreign project assistance) (Intermediate Outcome, 10,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) DLR 5.5: Allocated funds to Allocated funds are 49 Unapproved percent of total ADP Projects have not Value -- 125 percent excluding foreign project exceeded 20% of assistance (FY17/18 ADP) total ADP (excluding Foreign Project Assistance) in FY24 Date -- -- 04-Oct-2019 -- This data reflect the low number of projects that have been approved in the first quarter. It is expected to Comments reduce as more project are approved. ►DLI 6 TMAs using NFMIS to record transactions (cumulative) (Intermediate Outcome, 20,000,000.00, 0%) Baseline Actual (Previous) Actual (Current) FY23/24 (yr5) DLR 6.5: 30 TMAs under DLR 6.2, 6.3 and 6.4 and 20 No NFMIS decentralization additional TMAs Value -- None plan have used the NFMIS to record payments throughout Year 5 Date -- -- 04-Oct-2019 -- An NFMIS decentralization plan has been prepared. There is progress in extending NFMIS to KP districts in Comments the Merged Areas. 10/15/2019 Page 10 of 10