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: 7 | ARCHIVED on 23-May-2016 | ISR23312 | Implementing Agencies: National Agency for Fiscal Administration (NAFA) Key Dates Key Project Dates Bank Approval Date:26-Apr-2013 Effectiveness Date:09-Aug-2013 Planned Mid Term Review Date:21-Mar-2016 Actual Mid-Term Review Date:21-Mar-2016 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 5/23/2016 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 Unsatisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Unsatisfactory  Moderately Satisfactory Overall Risk Rating  Substantial  Substantial Implementation Status and Key Decisions The project is progressing well and has awarded many contracts. 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. However, the consolidation of local offices has not taken place and NAFA management have informed the Bank that this will not take place prior to the implementation of the revenue management system. The bidding process for the revenue management system is progressing very well. There significant interest witnessed in the early stages of the process has resulted in 6 strong bids received by NAFA. NAFA staff are handling the process openly and efficiently with support from their consultants and the Bank team. However, it seems that the initial estimates that such a system could be implemented within a two-year period were quite unrealistic. It is likely that the revenue management system will take upto 4 years to implement. However, NAFA management will wait to hear from the bidders on their proposed implementation timetables. The President and Vice-President of NAFA were dismissed on February 11th following allegations of corruption. These positions have since been filled with knowledgeable individuals from the private and public sector and the project implementation has not been affected. 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). These issues have been highlighted during the supervision mission. The team will continue to support NAFA management in putting these conditions in place. 5/23/2016 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  --  High  High Macroeconomic  --  Moderate  Moderate Sector Strategies and Policies  --  Moderate  Moderate Technical Design of Project or Program  --  Substantial  Substantial Institutional Capacity for Implementation and Sustainability  --  Substantial  High Fiduciary  --  Moderate  Moderate Environment and Social  --  Low  Low Stakeholders  --  Substantial  Substantial Other  --  --  -- Overall  --  Substantial  Substantial 5/23/2016 Page 3 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) 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 36.70 50.00 Date 31-Jan-2012 31-Dec-2014 13-May-2016 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 46%, PIT Value VAT 35.8%, PIT 11.9% VAT 29.9%, PIT 13.2% VAT 33.8%, PIT 12.3% 21% Date 31-Dec-2012 31-May-2015 13-May-2016 31-Dec-2018 PHINDPDOTBL  Efficiency in revenue collection measured as the revenue collected per NAFA staff (RON Thousands) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 6309.00 7328.20 7513.00 8715.00 Date 31-Dec-2012 31-Dec-2014 13-May-2016 31-Dec-2018 PHINDPDOTBL  Tax Gap for VAT, CIT, and PIT (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target VAT 40.2% VAT 40.2% VAT 30.2% Value CIT 33.0% -- CIT 33.0% CIT 28.0% PIT 39.4% PIT 39.4% PIT 34.4% Date 31-Dec-2014 -- 31-Dec-2014 31-Dec-2018 5/23/2016 Page 4 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) 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 222.00 159.00 159.00 176.00 Date 31-Dec-2012 31-May-2015 13-May-2016 31-Dec-2018 Overall Comments Please see the mid-term review for a detailed explanation of the progress on all the PDO indicators. Intermediate Results Indicators PHINDIRITBL  Comp 1-Instl Devt: Estimated tax gap is calculated annually (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value No -- No Yes Date 31-Dec-2012 -- 13-May-2016 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 -- N Y Date 31-Dec-2012 -- 13-May-2016 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 68.00 -- 63.00 74.80 Date 31-Dec-2013 -- 13-May-2016 31-Dec-2018 5/23/2016 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: Yield per audit of firms and High-wealth individuals (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target RON 760,000 Value RON 608,000 -- RON 608,000 HWI: Increase of 25% Date 31-Dec-2012 31-Dec-2013 13-May-2016 31-Dec-2018 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:81.6%, PIT 83.8%, VAT:83.5% Value SC: 76.5% -- SC80.0% PIT:86.0% SC:82.5% Date 31-Dec-2012 31-Dec-2013 13-May-2016 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 56.00 45.00 Date 31-Dec-2012 31-Dec-2013 13-May-2016 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% -- 1.1% 0.9% Date 31-Dec-2012 31-Dec-2013 13-May-2016 31-Dec-2018 5/23/2016 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: Ratio of NAFA staff in Taxpayer Services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 2.50 2.60 1.64 8.30 Date 31-Dec-2012 31-Dec-2013 13-May-2016 30-Sep-2018 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 96.60 98.00 Date 31-Dec-2012 31-Dec-2013 13-May-2016 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Taxpayers’ satisfaction with NAFA’s integrity (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 48.00 -- 52.00 55.00 Date 31-Dec-2013 -- 13-May-2016 31-Dec-2018 PHINDIRITBL  Comp 3-Taxpayer Srvcs and Corp Comm: Taxpayers’ satisfaction with NAFA’s quality of taxpayers services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 54.00 -- 56.00 62.00 Date 31-Dec-2013 -- 13-May-2016 31-Dec-2018 5/23/2016 Page 7 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: Taxpayer perception of the time required to comply with tax procedures (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 180.00 -- 204.00 144.00 Date 31-Dec-2013 -- 13-May-2016 31-Dec-2018 Overall Comments Please see the mid-term review for a detailed explanation of progress on all the intermediate indicators. 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 9.68 80.49 11% 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 5/23/2016 Page 8 of 9 Public Disclosure Copy Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Administration Modernization Project (P130202) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 5/23/2016 Page 9 of 9 Public Disclosure Copy