The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) Kazakhstan - Tax Administration Reform Project (P116696) EUROPE AND CENTRAL ASIA | Kazakhstan | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2010 | Seq No: 15 | ARCHIVED on 26-Mar-2019 | ISR35977 | Implementing Agencies: REPUBLIC OF KAZAKHSTAN, State Revenue Committee Key Dates Key Project Dates Bank Approval Date: 16-Feb-2010 Effectiveness Date: 17-Feb-2011 Planned Mid Term Review Date: 18-Nov-2013 Actual Mid-Term Review Date: 27-Jan-2014 Original Closing Date: 31-Dec-2014 Revised Closing Date: 31-Dec-2020 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) The development objective of the proposed project is to reform and strengthen the tax administration in order to improve the levelof voluntary compliance, enhance effectiveness to fight tax evasion, increase administrative efficiency, and reduce the potentialfor corruption. The project would have a positive impact on the business climate by improving client services, strengtheninginstitutional and human capacity in the tax administration, and reducing the burden of taxpayer compliance. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Institutional Development:(Cost $4.85 M) Operational Development:(Cost $11.28 M) IT Infrastructure Development:(Cost $27.60 M) Project Management:(Cost $4.20 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Moderately Satisfactory Moderately Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions All activities envisaged in the institutional development and operational development components have been completed, including extensive business process reengineering and legislative changes to introduce universal filing system in 2020 and improve tax administration. Completion of the IT modernization component is now required to translate the improved business processes into implementation solutions and allow the achievement of the PDO. 3/26/2019 Page 1 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) The IT Component has shown good progress since the last ISR, except in terms of procurement of the ITMS. The Risk Management System has been installed, tested and went to operation starting January 2019. The e-invoices system aimed at increasing VAT compliance, is progressing as planned: the E-invoicing module has been deployed and is now successfully in use; the Virtual Warehouse has been completed, piloted and is in full production status starting January 1, 2019. The remaining four modules are currently scheduled to be deployed by the end of 2019. Work on Integrated Database has been initiated and will complete by December 2020. The procurement of the ICB-01 "Integrated Tax Management System (ITMS)" was cancelled after bids were not considered to meet the minimal qualification requirements. 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 -- Substantial Substantial Technical Design of Project or Program -- Moderate Moderate Institutional Capacity for Implementation and Sustainability -- Moderate Moderate Fiduciary -- Moderate Moderate Environment and Social -- Low Low Stakeholders -- Moderate Moderate Other -- -- -- Overall -- Substantial Substantial Results PDO Indicators by Objectives / Outcomes Voluntary Compliance IN00668621 ►Increase in percentage of electronic filing (legal entities) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.20 95.00 99.00 96.00 Date 31-Dec-2008 26-Jul-2018 04-Feb-2019 31-Dec-2020 Enhance effectiveness to fight tax evasion IN00668622 ►Increase in adjustments made as a result of tax audits per audit (Number, Custom) 3/26/2019 Page 2 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) Baseline Actual (Previous) Actual (Current) End Target Value 35.00 29.40 29.10 50.00 Date 31-Dec-2013 28-Aug-2018 04-Feb-2019 31-Dec-2020 The calculation methodology was changed during the restructuring of September 2016. If previously the amount of adjustments (in million KZT) was divided by the number of staff working in audit, starting Comments: September 2016, the amount of adjustments (in mln KZT) is divided by the number of audits. Subsequently the baseline and target values were revised. IN00668626 ►VAT Productivity (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.30 0.35 0.35 0.40 Date 31-Dec-2010 23-Aug-2018 23-Aug-2018 31-Dec-2020 Updated information will become available in March 2019 Comments: Increase administrative efficiency IN00668623 ►Increase in percentage of field audits selected by automated procedure (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 31-Dec-2008 26-Jul-2018 04-Feb-2019 31-Dec-2020 The Risk Management System is in full operation starting January 2019. The information on the field audits selected by automated percentage will become available by July 2019 (semiannual) and January Comments: 2020 (Annual). Reduce the potential for corruption IN00668624 ►Public Perception of quality of taxpayer services (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Average - 88.5%, 88% Average - 87%: 85% Average: 89.5%. 89% Value legal entities, 89% -- (legal entities), 89% (legal entities); 90% individuals (individuals) (individuals) Date 31-Dec-2010 27-Jul-2018 27-Jul-2018 31-Dec-2020 The Survey was not conducted in 2018. The value remains the same. Comments: Reduce compliance cost IN00668625 ►Reduction in average time taken by taxpayers to comply with tax obligations as evidenced from survey (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target 3/26/2019 Page 3 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) Value 271.00 178.00 182.00 182.00 Date 31-Dec-2008 26-Jul-2018 04-Feb-2019 31-Dec-2018 Based on the survey results. Comments: Intermediate Results Indicators by Components Institutional Development IN00668627 ►Reorganization and consolidation of the TC on functional rationalization (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The End Target has been achieved. Tax audits centralised at the oblasts (regional Reorganization and offices) level and audit Value Not yet -- consoldation is rolled departments out eliminated at the rayon (district) offices. Taxpayer services centers are rolled out. Date 31-Dec-2008 23-Aug-2018 23-Aug-2018 31-Dec-2018 Operational Development IN00668628 ►Development of automated risk management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target RMS is fully Systems fully Value Not present -- operational operational Date 31-Dec-2008 23-Aug-2018 04-Feb-2019 31-Dec-2020 IT Infrastructure Development IN00668629 ►Development of design and systems architecture for the integrated IT system with major functions (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target ICB-03 under System fully Value Not present -- implementation. ICB- operational 01 - cancelled. Date 31-Dec-2008 23-Aug-2018 04-Feb-2019 31-Dec-2020 Data on Financial Performance 3/26/2019 Page 4 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P116696 IBRD-78350 Effective USD 17.00 13.50 3.50 6.13 7.37 45% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P116696 IBRD-78350 Effective 16-Feb-2010 12-Jul-2010 17-Feb-2011 31-Dec-2014 31-Dec-2020 Cumulative Disbursements Restructuring History Level 2 Approved on 03-Dec-2014 ,Level 2 Approved on 26-Sep-2016 ,Level 2 Approved on 07-Sep-2017 ,Level 2 Approved on 18-Jan-2018 Related Project(s) There are no related projects. 3/26/2019 Page 5 of 5