The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) Tax Administration and Statistical System Modernization Project (P163711) EUROPE AND CENTRAL ASIA | Kyrgyz Republic | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2020 | Seq No: 3 | ARCHIVED on 29-Jun-2021 | ISR47277 | Implementing Agencies: State Tax Service, National Statistical Committee, Kyrgyz Republic Key Dates Key Project Dates Bank Approval Date: 28-Feb-2020 Effectiveness Date: 09-Dec-2020 Planned Mid Term Review Date: 28-Apr-2023 Actual Mid-Term Review Date: Original Closing Date: 30-Sep-2025 Revised Closing Date: 30-Sep-2025 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) To improve effectiveness of tax collection and the national statistical system. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Component 1. STS Institutional Development:(Cost $2.07 M) Component 2. STS Operational Development:(Cost $14.49 M) Component 3. NSC Institutional Development:(Cost $4.80 M) Component 4. NSC Data Development:(Cost $11.82 M) Component 5. Project Management:(Cost $1.82 M) Overall Ratings Name 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 and Key Decisions 6/29/2021 Page 1 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) After the ratification of the Project Financing Agreement by the country’s Parliament on June 30, 2020, the Project was declared effective on December 9, 2020. The State Tax Service (STS) under the Ministry of Economy and Finance and the National Statistical Committee (NSC) have made good progress in project implementation despite the Project being impacted by COVID-19 and changes in the Government. The STS and NSC have advanced the preparation of activities that will lay the foundations for modernization reforms in tax administration and the national statistical system. These include STS strategic planning and feedback from stakeholders on tax administration areas that are in need of improvements and the development of a legal and regulatory framework by the NSC to support the implementation of the Law on Official Statistics. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance High Moderate Moderate Macroeconomic Substantial Moderate Moderate Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Moderate Moderate Institutional Capacity for Implementation and High Substantial Substantial Sustainability Fiduciary High High High Environment and Social Low Low Low Stakeholders Moderate Moderate Moderate Other -- Moderate Moderate Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Improve effectiveness of tax collection IN01008975 ►Reduction of VAT gap (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 13.20 13.20 13.20 12.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: The indicator measures improvement in the effectiveness of tax collection. The reduction of the VAT gap would serve as an indicator of improved tax compliance through higher effectiveness of tax administration 6/29/2021 Page 2 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) as a result of modernization of the STS. The baseline has been calculated using latest reliable national accounts statistics (for the year 2016). IN01009127 ►Net taxes assessed per field audit (thousand som) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 1,726.00 1,726.00 1,726.00 1,900.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. The indicator measures improvement in the effectiveness of tax collection. Increased additional net taxes assessed as a result of field audit will measure improved effectiveness of audit planning process (risk Comments: based) and quality of audit. The indicator will measure additional net tax assessed per field audit calculated by adjusting additional tax assessed for the amount of the reduction of assessed tax due to administrative or court appeals. IN01009129 ►Time required to comply with taxes - World Bank Doing Business Paying Taxes sub-indicator (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 220.00 220.00 220.00 205.00 Date 31-Oct-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. The indicator measures lowering of compliance burden for taxpayers. As improved business processes Comments: and taxpayer services would lead to less time required to prepare, file and pay (or withhold) CIT, VAT, labor taxes, including payroll taxes and social contributions (in hours per year). Improved effectiveness of the national statistical system IN01009126 ►Overall efficiency gain: reduction of time between completion of data collection and release of key statistical indicators to the public (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 90 days 90 days 90 days 66 days Date 15-Jul-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. This indicator measures elapsed time between completion of data collection and release to public of key statistical indicators (such as GDP, Financial, External Trade and Poverty and Income) to the public. To compute efficiency gains, a reference or baseline ‘elapsed time’ data would be required for a few of the business processes used in the current production cycles of NSC. A few representative indicators (e.g. Comments: GDP, Poverty & Income, etc.) can be used to compute a broader or overall efficiency gain. A weighted average (equal weights) of efficiency gains of such representative indicators can be used to compute the overall efficiency gain. The new workflow management system would also programmatically compute such elapsed times for business process activities of other indicators or data products. At least 20 indicators have been identified to compute a broader or overall efficiency gain. IN01009128 6/29/2021 Page 3 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) ►Openness of official statistics: measures coverage and openness of data across 21 data categories, using the Open Data Inventory (ODIN) (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 2018/19 score of 50 Value 2018/19 score of 50 2020/2021 score of 48 56.00 Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The indicator measures coverage and openness of data across 21 data categories, using the Open Data Comments: Inventory (ODIN) – a quantitative tool Intermediate Results Indicators by Components Component 1: STS Institutional Development IN01009132 ►Staff trained in strategic management, planning techniques, accountability system, quality assurance, quality control, and internal control systems out of total management staff (disaggreg. by gender) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 80.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: Formal training provided through the project. Consulting TOR’s include the initial training and establishing training courses that are subsequently given by trained STS staff. IN01009135 ►e-Services for taxpayers (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 22.00 22.00 22.00 27.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: Electronic services provided to taxpayers (e.g. e-filing, web services, taxpayer cabinet services) IN01009139 ►Taxpayers reporting that the experience of taxpayer services: i) STS website; ii) STS call center, has improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target 38.3% taxpayers 38.3% taxpayers report report to be fully to be fully satisfied with Baseline will be available satisfied with the STS the STS website. 24.8% as soon as completion of website. 24.8% taxpayers consider the Improvement by 10 Value taxpayer satisfaction taxpayers consider the quality of consultations percent survey is feasible due to quality of consultations provided by the call COVID-19 provided by the call center to be of high center to be of high quality. quality. 6/29/2021 Page 4 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Survey of large, medium and small companies to be carried out annually during implementation of the project to provide data on taxpayer satisfaction with the experience of taxpayer services (the STS website Comments: and call center). The first taxpayer satisfaction survey funded by the Tax Reform Technical Assistance was completed in December 2020, and the follow up survey will be also funded by the Tax Reform Technical Assistance engaging a local survey company and will take place in one year, tentatively in January 2022. IN01009142 ►e-Filing rate for payroll (PAYE) withholding tax (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 23.80 23.80 23.80 45.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: The indicator measures increase in e-filing rate for payroll (PAYE) withholding tax by employers. IN01009145 ►Taxpayers reporting satisfaction with their interaction with the tax administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Baseline will be available 36% of taxpayers 36% of taxpayers report as soon as completion of report full satisfaction full satisfaction with Improvement by 20 Value taxpayer satisfaction with personal personal interaction with percent survey is feasible due to interaction with the the STS. COVID-19 STS. Date 12-Dec-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Survey of large, medium and small companies to be carried out at least every two years during implementation of the project to provide data on satisfaction of taxpayers (businesses) with their Comments: interaction with the STS. The first taxpayer satisfaction survey funded by the Tax Reform Technical Assistance was completed in December 2020, and the follow up survey will be also funded by the Tax Reform Technical Assistance engaging a local survey company and will take place in one year, tentatively in January 2022. Component 2: STS Operational Development IN01009131 ►Net taxes assessed per desk audit (thousand som ) (Number (Thousand), Custom) Baseline Actual (Previous) Actual (Current) End Target Value 3,167.30 3,167.30 3,167.30 3,848.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results Comments: indicators. 6/29/2021 Page 5 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) The indicator measures improvement in the effectiveness of tax collection. Increased additional net taxes assessed as a result of desk audit will measure improved effectiveness of audit planning process (risk based) and quality of audit. The indicator will measure additional net tax assessed per desk audit calculated by adjusting additional tax assessed for the amount of the reduction of assessed tax due to administrative or court appeals. IN01009137 ►Payments required – WB Doing Business Paying Taxes indicator (Payments) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 26.00 26.00 26.00 23.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. The indicator measures lowering of compliance burden for taxpayers. As improved business processes Comments: and taxpayer services would lead to less time required to prepare, file and pay (or withhold) CIT, VAT, labor taxes, including payroll taxes and social contributions (in hours per year). IN01009144 ►Hours in traning on field audit techniques on average per auditor per year (disaggregated by gender) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 8.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: Formal training provided through the project. Consulting TOR’s include the initial training and establishing training courses that are subsequently given by trained STS staff. IN01009146 ►On-time filing rate for payroll (PAYE) withholding tax (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 80.20 80.20 80.20 87.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: The indicator will measure increase in on-time filing rate of payroll (PAYE) withholding tax by employers IN01009147 ►On-time filing rate for Value Added Tax (VAT) (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 93.80 93.80 93.80 97.00 Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 Comments: The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. 6/29/2021 Page 6 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) The indicator will measure increase in on-time filing rate of Value Added Tax IN01009148 ►Improved case management process for enforcement and tax collections (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The case management system is The automated case The automated case The automated case in place and the Value management system is management system is management system majority of routine not in place. not in place. is not in place. enforcement activities are conducted using this system. Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: This indicator measures the establishment of a comprehensive case management process for enforcement and tax collections. IN01009149 ►Taxpayer segment-focused measures in the STS Annual Business Plan and Plan of Measures to Increase State Tax Revenue (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target STS Annual Business STS Annual Business STS Annual Business STS Annual Business Plan and Plan of Plan and Plan of Plan and Plan of Plan and Plan of Measures to Increase Measures to Increase Measures to Increase Measures to Increase Value State Tax Revenue do State Tax Revenue do State Tax Revenue do State Tax Revenue not currently have not currently have not currently have have measures measures by taxpayer measures by taxpayer measures by taxpayer identified by taxpayer segment segment segment segment Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: This indicator measures the increased use of taxpayer segmentation to traget the STS compliance management efforts. IN01009150 ►Improved process for compliance risk management (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Compliance Risk STS does not have a STS does not have a STS does not have a Management Board or Value Compliance Risk Compliance Risk Compliance Risk equivalent established Management Board Management Board Management Board and operational within the STS Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: This indicator measures the movement of STS towards using risk management and incorporating it into their day-to-day and strategic operations. IN01009151 ►Risk based VAT refund claims automation (Text, Custom) 6/29/2021 Page 7 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) Baseline Actual (Previous) Actual (Current) End Target Risk based verification No risk based verification No risk based verification No risk based procedures for VAT Value procedures for VAT procedures for VAT verification procedures refund claims refund claims refund claims for VAT refund claims developed and used Date 15-Nov-2019 30-Nov-2020 17-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: This indicator measures the introduction of risk based automatic evaluation of refund claims. Component 3: NSC Institutional Development IN01009130 ►Decrees issued by the Government to enforce legal and regulatory reforms on statistics (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target At least 15 decrees No decrees issued on No decrees issued on No decrees issued on Value issued by the official statistics official statistics official statistics Government Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: The indicator reflects the number of decrees issued. IN01009134 ►University level curricula in local universities, including courses in Official Statistics, and Data Science (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target No courses exist in local No courses exist in local No courses exist in At least one University Value universities in Official universities in Official local universities in level course in Official Statistics Statistics Official Statistics Statistics Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. Comments: The indicator reflects the number of university level courses in Official Statistics, and Data Science introduced. IN01009140 ►Gender disparity in staff count by gender at NSC: top level female managers at the oblast and rayon level (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 26.00 26.00 26.00 33.00 Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The project activities are still in their initial stage and thus have not had impact on Project’s results indicators. This indicator will take a count of the total staff broken down by gender. It would be further broken down Comments: into two categories – Managers – a) department managers at the NSC HQ including MCC, Professional staff (Economists, Statisticians and IT Professionals) and b) Others (non-professional, non-managerial Staff). This count will be taken at the HQ, oblasts and at rayon levels and aggregated at oblast and rayon levels. 6/29/2021 Page 8 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) IN01009143 ►Gender disparity in new staff hired during the project at NSC (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The newly recruited staff maintain a less Value n/a n/a 29% than 15% disparity by gender Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 This indicator will take a count of the total new staff hired in the Professional and Managerial streams Comments: broken down by gender. It would be further broken down into three categories – NSC HQ, oblasts and rayons. Component 4: NSC Data Development IN01009133 ►World Bank Statistical Performance Indicator (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Improvement by 10 Value 75.5 in 2018 75.5 in 2018 78.6 in 2019 points Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 World Bank Statistical Performance Indicator measures 4 dimensions (Methodology, Standards and Classifications (MSC); Censuses and Surveys (CS); Availability of Key Indicators (AKI), and Comments: Dissemination Practices and Openness (DPO) IN01009136 ►Digitization of surveys using CAPI, CATI, CAWI - reduction of paper-based questionnaires and surveys (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target About 25% surveys are About 25% surveys are About 25% surveys At least 75% of Value digitalized digitalized are digitalized surveys are digitized. Date 15-Nov-2019 30-Nov-2020 14-Jun-2021 31-Oct-2025 The indicator reflects the level of digitalization in data collection and reduction in paper-based Comments: questionnaires and surveys IN01009138 ►Overall data users satisfaction (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 38.00 38.00 38.00 60.00 Date 30-Oct-2018 30-Nov-2020 14-Jun-2021 31-Oct-2025 The indicator measures 6 statistical data service quality dimensions, including (i) importance, relevance and accessibility of data products and services, (ii) visibility and readability of data products and services, (iii) NSC website’s relevance and searchability, (iv) modernity of the website’s design, including its visual Comments: clarity and readability, (v) transparency and independence, credibility and reliability of the NSC as institution, (vi) professionalism of NSC staff. The satisfaction survey was completed in June 2021. The survey results are not available yet, pending processing and analysis of the collected data which is 6/29/2021 Page 9 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) delayed due to COVID pandemic. NSC staff has been shifted to online mode of operation, and it complicates implementation and completion of the whole process. IN01009141 ►Time required to respond to citizen requests received through the NSC website (Days, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 14.00 14.00 14.00 11.00 Date 12-Dec-2019 30-Nov-2020 14-Jun-2021 29-Dec-2025 Comments: Time required to respond to citizen requests received through the NSC website Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P163711 IDA-65460 Effective USD 17.50 17.50 0.00 0.00 18.29 0% P163711 IDA-D5660 Effective USD 17.50 17.50 0.00 0.35 17.87 1.9% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P163711 IDA-65460 Effective 28-Feb-2020 28-Apr-2020 09-Dec-2020 30-Sep-2025 30-Sep-2025 P163711 IDA-D5660 Effective 28-Feb-2020 28-Apr-2020 09-Dec-2020 30-Sep-2025 30-Sep-2025 Cumulative Disbursements 6/29/2021 Page 10 of 11 The World Bank Implementation Status & Results Report Tax Administration and Statistical System Modernization Project (P163711) PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 6/29/2021 Page 11 of 11