Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) SOUTH ASIA | Bangladesh | Governance Global Practice | IBRD/IDA | Program-for-Results | FY 2014 | Seq No: 5 | ARCHIVED on 30-Jun-2016 | ISR24364 | Implementing Agencies: National Board of Revenue Program Development Objectives Program Development Objective (from Program-for-Results Appraisal Document) The PDO is to improve revenue mobilization and transparency in the VAT administration. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO  Moderately Satisfactory  Moderately Satisfactory Overall Implementation Progress (IP)  Moderately Satisfactory  Moderately Satisfactory Overall Risk Rating  --  Substantial Implementation Status and Key Decisions The program became effective on January 11, 2015. Several results have been achieved including the contracting of a project support consultancy, a contract has been signed with a software and IT hardware provider, a contract has been signed with a contact center and central processing center. High level business processes have been designed, and the detailed registration processes have been approved and used to develop the online registration module. The revised organizational structures have been prepared and approved by the Project Steering Committee. A taxpayer education program has been developed and will need to be revised in line with the new implementation schedule. Under the program, several disbursement linked indicators from the first year of implementation have been met. The independent verification entity has confirmed the achievement of DLI 1.2.1. Verification of DLIs 5.1 and 6.1 will be concluded in July/August 2016. DLI 1.1.1 is due to be revised during the restructuring.Second year DLIs are will be verified in early FY 17 - these are DLIs 1.2.2 and 5.2 and 6.2. DLI 1.1.2 and DLI 3.1 are planned to be achieved during FY17. 6/30/2016 Public Disclosure Copy Page 1 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) 6/30/2016 Public Disclosure Copy Page 2 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed Disbursed P129770 IDA-54260 Effective XDR 38.80 38.80 0.00 7.94 30.86 20% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P129770 IDA-54260 Effective 09-May-2014 07-Dec-2014 11-Jan-2015 30-Jun-2020 -- Disbursement Linked Indicators (DLI) PHDLIPDOTBL  DLI 1.1: VAT Implementation Plan on Track (Text) Baseline Actual (Previous) Actual (Current) Baseline 2012/13- VAT Implementation Plan The DLI has been partially Value The DLI has been partially met. approved by Minister of met. Finance Date -- -- 27-Aug-2015 Comments Although DLI 1.1.1 has been completed. However, as agreed with the client, this DLI will be removed from the program during the restructuring. DLI 1.1.2 “ At least 40,000 active VAT taxpayers have been registered in the COTS VAT database” . The registration module has been through user acceptance testing and will be deployed during the fiscal year FY17/18. Initial estimates of registrations indicate that there may be fewer than 30,000 currently active VAT taxpayers which had been estimated at the time of Board approval. PHDLIPDOTBL  DLI 1.2: VAT Implementation Plan on Track (Text) Baseline Actual (Previous) Actual (Current) 6/30/2016 Public Disclosure Copy Page 3 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) Baseline 2012/13- VAT Implementation Plan Value The DLI has not been met. The DLI has been met. approved by Minister of Finance Date 17-Jun-2016 -- 27-Aug-2015 Comments DLI 1.2.1 has been completed, and confirmed by the independent verification entity. A contract was signed with the Project Support Consultancy firm, ECORYS and its joint venture with PRI Consultancy on July 14, 2015. There is one issue regarding the final tender amount which requires follow up by the project team. The final award amount is higher than the expenditure framework budget provided in the DPP. The project team should confirm that the Government’s financial management rules were followed in seeking approval of the tender and all public procurement rules were followed. In addition, the procurement plan needs to be updated to ensure reference to this procurement. The tender evaluation report should ensure reference to all the firms referenced in the technical proposal, and the DPP revised to reflect the final award amount. The project team will need to take necessary actions to ensure the reporting is accessible to the independent verification entity in a timely manner to facilitate ease of verification and confirmation of the disbursement against the advance that has already been made. DLI 1.1.2 has been completed, subject to independent verification. DLI 1.2.2 is in progress. A contract has been signed with the Contact Center and Central Processing Center services. This is due to be verified in June 2016. PHDLIPDOTBL  DLI 2: Number of registered active VAT taxpayers (thousands) (Number) Baseline Actual (Previous) Actual (Current) Value -- -- -- Date -- -- 27-Aug-2015 Comments Actual (Current)- No target is set until year 3. Baseline to be established once the VAT online system is operationalized. Initial estimates at time of Board approval indicated approximately 30,000 current active taxpayers. This includes branches of the same company. The baseline is to be established through the launch of the online registration module and taken at 3 months after launch. PHDLIPDOTBL  DLI 3: Number of taxpayers who filed on-line (Number) Baseline Actual (Previous) Actual (Current) Value -- -- -- Date -- -- 27-Aug-2015 Comments Actual (Current)- No target is set until year 3. Baseline to be established once the VAT online system is operationalized. This has now been delayed until fiscal year 2017/18 when the 2012 Act is due to be introduced and the online filing system launched. PHDLIPDOTBL  DLI 4: Percent of VAT Large Taxpayer Unit taxpayers who paid on-line (Percentage) Baseline Actual (Previous) Actual (Current) 6/30/2016 Public Disclosure Copy Page 4 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) Value -- -- -- Date -- -- 27-Aug-2015 Comments Actual (Current)- No target is set until year 3. Baseline to be established once the VAT online system is operationalized. This has now been delayed until fiscal year 2017/18 when the 2012 Act is due to be introduced and the online payment system launched. PHDLIPDOTBL  DLI 5- Greater transparency (Text) Baseline Actual (Previous) Actual (Current) The DLI has not been fully Value 75 The DLI has not been fully met. met. Date 12-Mar-2014 -- 27-Aug-2015 Comments The DLI on greater transparency has been met for year 1, with significant progress recorded during 2015 and the result will now be verified in June 2016. PHDLIPDOTBL  DLI 6- Fiduciary Actions (Text) Baseline Actual (Previous) Actual (Current) With the submission of With the submission of quarterly quarterly fund utilization Value 2012/13 fund utilization report, DLI 6.3.2 report, DLI 6.3.2 has been has been met. met. Date -- -- 27-Aug-2015 Comments DLI 6.1 is due to be verified in June 2016. Results Results Area Intermediate Results Area Project Development Objective Indicators 6/30/2016 Public Disclosure Copy Page 5 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) PHINDPDOTBL  VAT Tax-GDP Ratio (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3.70 3.18 3.63 4.70 Date 12-Mar-2014 27-Aug-2015 27-Aug-2015 30-Jun-2020 Comments Sources for the VAT : GDP indicator were discussed during the March 2016 mission. Sources used show VAT: GDP as follows: FY13-14 (crore) FY14-15 (crore) VAT Revs Finance Division 45900 55000 VAT Revs IMF () 55000 59000 GDP IMF, nominal 1173800 1337600 GDP BBS and NBR, current price 1343674 1515802 GDP Finance Division at current price (in billion taka) 1343670 1513600 % % VAT: GDP (IMF:IMF) 4.69 4.41 VAT: GDP (FD: BBS), current 3.42 3.63 PHINDPDOTBL  Compliance with the availability of information listed in the RTI rules and regulations (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 75.00 75.00 75.00 100.00 Date 12-Mar-2014 27-Aug-2015 27-Aug-2015 30-Jun-2020 Overall Comments Intermediate Results Indicators PHINDIRITBL  Intermediate Results Indicator 1: VAT Implementation Plan on Track (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target At least 60,000 VAT Implementation Plan Target has not been Target has not been VAT returns are Value approved by Minister of met. met. processed per Finance month Date 01-Jul-2013 27-Aug-2015 27-Aug-2015 30-Jun-2020 6/30/2016 Public Disclosure Copy Page 6 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) PHINDIRITBL  Intermediate Results Indicator 2: New registered active VAT taxpayers (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 3: Value of VAT e-payments (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 4: Reduced VAT stop filers (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 5: Taxpayers file on-line (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 6: VAT Large Taxpayers who pay on-line (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- 50.00 Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 7: Average time to process and issue tax refunds (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target 6/30/2016 Public Disclosure Copy Page 7 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 8: “Hit rate” of tax audits –percentage of tax audits resulting in additional tax assessments (in a year) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate Results Indicator 9: Lower taxpayer costs for complying with VAT (Amount(USD), Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- -- Date 01-Jul-2016 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate results Indicator 10. Greater transparency (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Tax collected disclosed; Taxpayer satisfaction The target has not The target has not been survey Value Information disclosed been fully met. fully met. disclosed; Processing and Contact center performance disclosed Date 12-Mar-2014 27-Aug-2015 27-Aug-2015 30-Jun-2020 PHINDIRITBL  Intermediate results Indicator 11. Greater taxpayer satisfaction with services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value -- -- -- 75.00 Date 30-Jun-2014 27-Aug-2015 27-Aug-2015 30-Jun-2020 6/30/2016 Public Disclosure Copy Page 8 of 9 Public Disclosure Copy The World Bank Implementation Status & Results Report Revenue Mobilization Program for Results: VAT Improvement Program (VIP) (P129770) PHINDIRITBL  Intermediate Results Indicator 12. Improved fiduciary management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 75 percent of NCB contracts are done through e-GP. All significant audit objections resolved in 6 The target has been The target has been months. Value -- partially met. partially met. Submit quarterly fund utilization report to FD & complete fund release processes after each quarter. Date 12-Mar-2014 27-Aug-2015 27-Aug-2015 30-Jun-2020 Overall Comments 6/30/2016 Public Disclosure Copy Page 9 of 9