The World Bank Revenue Administration Modernization Project (P130202) REPORT NO.: RES34952 RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF REVENUE ADMINISTRATION MODERNIZATION PROJECT APPROVED ON APRIL 26, 2013 TO ROMANIA GOVERNANCE EUROPE AND CENTRAL ASIA Regional Vice President: Cyril E Muller Country Director: Arup Banerji Senior Global Practice Director: Deborah L. Wetzel Practice Manager/Manager: Roberto Adrian Senderowitsch Task Team Leader: Moses Wasike The World Bank Revenue Administration Modernization Project (P130202) BASIC DATA Product Information Project ID Financing Instrument P130202 Investment Project Financing Original EA Category Current EA Category Not Required (C) Not Required (C) Approval Date Current Closing Date 26-Apr-2013 31-Mar-2021 Organizations Borrower Responsible Agency Romania,Romania National Agency for Fiscal Administration (NAFA) Project Development Objective (PDO) Original PDO 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. OPS_TABLE_PDO_CURRENTPDO Summary Status of Financing Net Ln/Cr/Tf Approval Signing Effectiveness Closing Commitment Disbursed Undisbursed IBRD-82610 26-Apr-2013 08-May-2013 09-Aug-2013 31-Mar-2021 91.80 19.26 69.08 Policy Waiver(s) Does this restructuring trigger the need for any policy waiver(s)? No The World Bank Revenue Administration Modernization Project (P130202) I. PROJECT STATUS AND RATIONALE FOR RESTRUCTURING On November 19, 2018, the Bank received an official request from the Ministry of Public Finance, on behalf of the National Agency for Fiscal Administration (NAFA) for cancellation of Euro 51,902,124 of the loan amount, effectively cancelling the undrawn balance of the loan that is not committed. The cancellation was requested due to changes in circumstances and approach in pursuing implementation of the national revenue management system, a core part of the project. On December 13, 2018, the Bank received a supplemental request to establish March 31, 2019 as a revised project closing date. During the November 2017 mission, Government proposed to cancel the project citing various reasons: (i) that there had been numerous changes to tax legislation that could not be accommodated in the revenue management system as designed; (ii) that procurement of the revenue management system was significantly delayed and too slow to match NAFA’s urgent and priority information technology system needs; (iii) that the implementing entity, NAFA, did not have sufficient capacity to implement the project; (iv) that the management of NAFA was unwilling to sign off on procurement of the revenue management system owing to likely retribution by auditors – the Court of Accounts; and (v) that Government was in the process of reorganizing its information technology support structures, including replacing NAFA with a new institution under the Ministry of Public Finance. Since then, all key project activities were held in abeyance. II. DESCRIPTION OF PROPOSED CHANGES The proposed changes will cancel the full unwithdrawn and uncommitted amount under the loan and will establish March 31, 2019 as the revised closing date to allow for completion of ongoing contracts and audit. III. SUMMARY OF CHANGES Changed Not Changed Loan Closing Date(s) ✔ Cancellations Proposed ✔ Reallocation between Disbursement Categories ✔ Implementing Agency ✔ DDO Status ✔ The World Bank Revenue Administration Modernization Project (P130202) Project's Development Objectives ✔ Results Framework ✔ Components and Cost ✔ Disbursements Arrangements ✔ Disbursement Estimates ✔ Overall Risk Rating ✔ Safeguard Policies Triggered ✔ EA category ✔ Legal Covenants ✔ Institutional Arrangements ✔ Financial Management ✔ Procurement ✔ Implementation Schedule ✔ Other Change(s) ✔ Economic and Financial Analysis ✔ Technical Analysis ✔ Social Analysis ✔ Environmental Analysis ✔ IV. DETAILED CHANGE(S) OPS_DETAILEDCHANGES_LOANCLOSING_TABLE LOAN CLOSING DATE(S) Original Revised Proposed Proposed Deadline Ln/Cr/Tf Status Closing Closing(s) Closing for Withdrawal Applications IBRD-82610 Effective 31-Mar-2019 31-Mar-2021 31-Mar-2019 31-Jul-2019 OPS_DETAILEDCHANGES_CANCELLATIONS_TABLE The World Bank Revenue Administration Modernization Project (P130202) CANCELLATIONS Value Reason Current Cancellation New Ln/Cr/Tf Status Currency Date of for Amount Amount Amount Cancellation Cancellation BORROWER' Disburs S REQUEST IBRD- ing&Re EUR 70,000,000.00 51,902,124.00 19-Nov-2018 18,097,876.00 FOR 82610-001 paying COUNTRY REASONS OPS_DETAILEDCHANGES_REALLOCATION _TABLE REALLOCATION BETWEEN DISBURSEMENT CATEGORIES Financing % Current Allocation Actuals + Committed Proposed Allocation (Type Total) Current Proposed IBRD-82610-001 | Currency: EUR iLap Category Sequence No: 1 Current Expenditure Category: G,non-CS,CS incl.AUD,TR,IOC 70,000,000.00 17,327,446.69 18,097,876.00 100.00 100.00 Total 70,000,000.00 17,327,446.69 18,097,876.00 .