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: 14 | ARCHIVED on 10-Sep-2018 | ISR33634 | 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 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 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 Satisfactory Overall Risk Rating Substantial Substantial Implementation Status and Key Decisions The Project is at a turning point stage with the long delayed IT modernization component now commenced. Most of the activities envisaged in the institutional development and operational development components have been completed, including extensive business process reengineering. The SRC has started implementation of the IT modernization component of the Project, which is critical to support a number of reforms outlined in the Presidential 100-steps agenda. 9/10/2018 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. The Risk Management System has been installed and is being tested. 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 and is being piloted with a phased implementation planned over the remainder of 2018. It is expected to be in full production status by 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 with the successful supplier, and the required prototyping activities of the various models of the data repositories have been initiated. Upon the Government's request, the loan closing date has been extended to December 31, 2020. This will enable the project to meet its development objective, albeit later than originally envisaged. 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 IN00626980 ►Increase in percentage of electronic filing (legal entities) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.20 95.00 95.00 96.00 Date 31-Dec-2008 31-Dec-2017 26-Jul-2018 31-Dec-2020 Enhance effectiveness to fight tax evasion IN00627027 9/10/2018 Page 2 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) ►Increase in adjustments made as a result of tax audits per audit (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 35.00 55.00 29.40 50.00 Date 31-Dec-2013 31-Dec-2016 28-Aug-2018 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. IN00627033 ►VAT Productivity (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.30 0.40 0.35 0.40 Date 31-Dec-2010 31-Dec-2017 23-Aug-2018 31-Dec-2020 Increase administrative efficiency IN00627028 ►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 26-Jul-2018 31-Dec-2020 The automated procedure is being tested Comments: Reduce the potential for corruption IN00627032 ►Public Perception of quality of taxpayer services (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Average - 88.5%, 88% Average - 87%: 85% Average - 87%: 85% Average: 89.5%. 89% Value legal entities, 89% (legal entities), 89% (legal entities), 89% (legal entities); 90% individuals (individuals) (individuals) (individuals) Date 31-Dec-2010 31-Dec-2016 27-Jul-2018 31-Dec-2020 Reduce compliance cost IN00627026 ►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 Value 271.00 178.00 178.00 182.00 Date 31-Dec-2008 26-Jul-2018 26-Jul-2018 31-Dec-2018 9/10/2018 Page 3 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) Intermediate Results Indicators by Components Institutional Development IN00627029 ►Reorganization and consolidation of the TC on functional rationalization (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The End Target has The End Target has been been achieved. Tax achieved. Tax audits audits centralised at centralised at the oblasts the oblasts (regional (regional offices) level Reorganization and offices) level and audit Value Not yet and audit departments consoldation is rolled departments eliminated at the rayon out eliminated at the rayon (district) offices. (district) offices. Taxpayer services Taxpayer services centers are rolled out. centers are rolled out. Date 31-Dec-2008 05-Jan-2018 23-Aug-2018 31-Dec-2018 Operational Development IN00627031 ►Development of automated risk management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Systems fully Value Not present RMS tested RMS is tested operational Date 31-Dec-2008 05-Jan-2018 23-Aug-2018 31-Dec-2020 IT Infrastructure Development IN00627030 ►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 ICB-03 signed. ICB-01 System fully Value Not present implementation. ICB- requires re-bidding operational 01 - BER is expected. Date 31-Dec-2008 10-Jan-2018 23-Aug-2018 31-Dec-2020 Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed 9/10/2018 Page 4 of 5 The World Bank Implementation Status & Results Report Kazakhstan - Tax Administration Reform Project (P116696) P116696 IBRD-78350 Effective USD 17.00 13.50 3.50 5.49 8.01 41% 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. 9/10/2018 Page 5 of 5