The World Bank Report No: ISR12110 Implementation Status & Results Kazakhstan Kazakhstan - Tax Administration Reform Project (JERP) (P116696) Public Disclosure Copy Operation Name: Kazakhstan - Tax Administration Reform Project (JERP) Project Stage: Implementation Seq.No: 5 Status: ARCHIVED Archive Date: 13-Oct-2013 (P116696) Country: Kazakhstan Approval FY: 2010 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 16-Feb-2010 Original Closing Date 31-Dec-2014 Planned Mid Term Review Date 18-Nov-2013 Last Archived ISR Date 13-Mar-2013 Effectiveness Date 17-Feb-2011 Revised Closing Date 31-Dec-2014 Actual Mid Term Review Date 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 level of voluntary compliance, enhance effectiveness to fight tax evasion, increase administrative efficiency, and reduce the potential for corruption. The project would have a positive impact on the business climate by improving client services, strengthening institutional 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? Yes No Component(s) Component Name Component Cost Institutional Development 4.85 Operational Development 14.78 IT Infrastructure Development 27.60 Project Management 4.20 Public Disclosure Copy Overall Ratings Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Moderately Satisfactory Overall Risk Rating Moderate Moderate Implementation Status Overview Good progress continues to be made in project implementation. Consulting activities on high priority topics are either in progress or in their final stages of execution: (i) the introduction of universal filing, (ii) reform of excise taxation, (iii) modernization of field and desk audits, (iv) reform of corporate income tax, non-resident taxation and financial sector Page 1 of 5 The World Bank Report No: ISR12110 taxation, and (v) business process reengineering (BPR), risk management, and institutional reforms. The introduction of universal filing will be a major steps in bringing the Kazakhstan tax system in line with international standards. The reforms in excise taxation will introduce simplified reporting, change to a risk management focus for enforcement and allow more effective surveillance of excise goods. The three large consulting works that are currently ongoing will provide the basis for the new modernized processes that the TC will employ. Their recommendations for the modernization of audit, reform of taxation for corporations, non-residents and the fiscal sector and the BPR processes will be supported by Public Disclosure Copy the new IT system which is being acquired under this program Locations No Location data has been entered Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Non-oil Tax/GDP ratio increased Percentage Value 16.70 22.70 19.00 Date 31-Dec-2008 16-Nov-2012 31-Dec-2014 Comments Good progress Nominal increase in average tax revenue Number Value 328.00 668.00 530.00 collected by each tax official Date 31-Dec-2008 16-Nov-2012 31-Dec-2014 Comments Progress Increase in percentage of electronic filing Percentage Value 61.20 81.50 80.00 Date 31-Dec-2008 16-Nov-2012 31-Dec-2014 Comments Good progress Reduction in average time taken by taxpayers Number Value 271.00 188.00 150.00 to comply with tax obligations as evidenced Date 31-Dec-2008 16-Nov-2012 31-Dec-2014 from survey Comments These numbers are computed annually. Hence it has not changed in the last 6 month. However, significant improvement from baseline. Public Disclosure Copy Improvement in perception of taxpayers Text Value 84.7% Signifcant improvement regarding level of professionalism and honesty Date 30-Dec-2011 16-Nov-2012 31-Dec-2014 of tax administration Comments Improvement Increase in adjustments made as a result of tax Number Value 172.00 291.00 210.00 audits per auditor Date 31-Dec-2008 15-Jun-2013 31-Dec-2014 Comments Good progress Increase in percentage of field audits selected Percentage Value by automated procedure Date 31-Dec-2008 Page 2 of 5 The World Bank Report No: ISR12110 Comments Not due yet. Part of activity under QCBS -01. The contracted activity has recently commenced. Public Disclosure Copy Reduction in cumulative stock of arrears as a Percentage Value 1.70 0.76 1.30 percentage of total tax collected in a year Date 31-Dec-2008 15-Jun-2013 31-Dec-2014 Comments Good progress Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target Organizational review and design of Text Value Not yet appropriate organizational structure at HQ and Date 31-Dec-2010 15-Jun-2013 in the regions Comments Not due yet Reorganization and consolidation of the TC on Text Value functional rationalization Date 15-Jun-2013 Comments Not yet due Feasibility study for establishing a tax Training Text Value Institute Date 15-Jun-2013 Comments Not yet due VAT productivity Number Value 0.30 Date 31-Dec-2008 15-Jun-2013 Comments It will be measured at the time of mid-term review in December 2013. Public perception of quality of taxpayer Text Value 93.2% 93.2% services Date 01-Jan-2013 15-Jun-2013 Comments The first public perception survey has been conducted in Public Disclosure Copy January 2013. The results will be examined during the next mission in April 2013. Development of design and systems Text Value architecture for the integrated IT system with Date major functions Comments Not due yet Development of data processing centers Text Value Page 3 of 5 The World Bank Report No: ISR12110 Date Comments Development of call centers Text Value Public Disclosure Copy Date Comments Not yet due Development of automated risk management Text Value and VAT refund system Date 15-Jun-2013 Comments Not yet due Data on Financial Performance (as of 23-Apr-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date P116696 IBRD-78350 Effective 16-Feb-2010 12-Jul-2010 17-Feb-2011 31-Dec-2014 31-Dec-2014 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P116696 IBRD-78350 Effective USD 17.00 17.00 0.00 1.67 15.33 10.00 Disbursement Graph Public Disclosure Copy Page 4 of 5 The World Bank Report No: ISR12110 Key Decisions Regarding Implementation The recommendations for universal filing have been tentatively approved by the Minister and an implementation plan has been established. Current plans are for a phased introduction of universal filing. Public Disclosure Copy Restructuring History There has been no restructuring to date. Related Projects There are no related projects. Public Disclosure Copy Page 5 of 5