The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Tax Reform Operation (P171892) EUROPE AND CENTRAL ASIA | Tajikistan | Governance Global Practice | Requesting Unit: ECCCA | Responsible Unit: EECG1 IBRD/IDA | Program-for-Results Financing | FY 2021 | Team Leader(s): Raul Felix Junquera-Varela, Hassan Aliev Seq No: 4 | ARCHIVED on 11-Jan-2023 | ISR54657 | Created by: Hassan Aliev on 20-Dec-2022 | Modified by: Hassan Aliev on 11-Jan-2023 Program Development Objectives PDO Table Program Development Objective (from Program Appraisal Document) To simplify the tax system, enhance quality of taxpayer services, and improve voluntary compliance. Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Satisfactory Satisfactory Implementation Status and Key Decisions The operation has achieved Disbursement Linked Indicator (DLI)/Disbursement Linked Result (DLR) 1 and DLI/DLR 2.1 and is on track to achieve DLR 2.2 in early 2023. To date, the operation has complied with all of the legal covenants listed under the Financing Agreement Schedule 2. The Project Implementation Group (PIG) has hired all key staff. Most of the items in the Program Action Plan have been accomplished or are in progress, as reflected in this Implementation Status Report (ISR). The appointment of two information and communication technology (ICT) specialists in the PIG to ensure adequate implementation of ICT procurement under the program is in progress. The next implementation support mission is scheduled for mid - May 2023. Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P171892 IDA-D8350 Effective USD 50.00 50.00 0.00 12.72 33.99 27% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P171892 IDA-D8350 Effective 28-May-2021 03-Jun-2021 06-Dec-2021 31-Dec-2026 31-Dec-2026 Program Action Plan Action Description Capacity building on PforR implementation is conducted for the Tax Reform Secretariat and PIG Source DLI# Responsibility Timing Timing Value Status 1/11/2023 Page 1 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Within 2 months after Technical TC Other In Progress effectiveness Capacity building is delivered through a series of consultations, organized by WB team for Tax Reform Secretariat Completion Measurement and PIG. Comments Action Description Third party verification (TPV) agency is contracted. Source DLI# Responsibility Timing Timing Value Status Within 3 months after Technical TC Other Completed effectiveness Completion Measurement Signed contract between PIU and TPV agency Comments Appointment of M&E specialist in PIG to ensure adequate M&E arrangements, data collection and monitoring of Action Description results under the Program Source DLI# Responsibility Timing Timing Value Status Within 2 months after Technical TC Other Completed effectiveness Completion Measurement M&E Specialist is hired Comments Action Description Appointment of 2 ICT specialists in PIG to ensure adequate implementation of ICT procurement under the Program Source DLI# Responsibility Timing Timing Value Status DLI 4 Within two months after Technical TC, PIG Other In Progress effectiveness Completion Measurement IT Specialists are hired Comments Appointment of Environmental and Social (E&S) Specialists responsible for (1) communication and outreach, (2) Action Description outreach to taxpayers to ensure compliance, and (3) environmental and social risks mitigation, monitoring, and reporting at the PIG. Source DLI# Responsibility Timing Timing Value Status Environmental and Social Within 2 months after TC, PIG Other Completed Systems effectiveness 1/11/2023 Page 2 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Completion Measurement E&S Specialists are hired The Environmental Specialist was hired and contracted on September 27, 2022. Comments The Social Specialist was hired and contracted on February 20, 2022. Strengthen the M&E capacity of the tax authorities based on modern methodologies to assess key performance Action Description indicators Source DLI# Responsibility Timing Timing Value Status DLI 4 December 2021, throughout the Technical TC Other In Progress Program implementation Completion Measurement The M&E system is strengthened at the TC. Regular M&E reports on KPIs are produced Comments Action Description Training on cost-benefit analysis of tax incentives Source DLI# Responsibility Timing Timing Value Status Technical DLI 3 MoF Due Date 31-Jan-2023 Not Yet Due Completion Measurement Relevant MoF staff is trained on cost-benefit analysis of tax incentives Comments Action Description Midline and endline taxpayer surveys Source DLI# Responsibility Timing Timing Value Status Midline survey - 2023, Technical TC Other In Progress endline survey - 2026 Midline and endline taxpayer surveys are completed and data on taxpayer satisfaction with selected available and Completion Measurement new services is available Draft Terms of reference for hiring a survey company prepared and sent for review and approval to the World Bank and posted in the STEP system for bank approval. Comments Establish taxpayer service centers in all district level tax authorities, possibly in rural densely populated jamoats, Action Description where taxpayers have no access to the internet Source DLI# Responsibility Timing Timing Value Status 1/11/2023 Page 3 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Environmental and Social DLI 6 TC Due Date 30-Jun-2023 In Progress Systems Completion Measurement Taxpayer service centers are established in all district level tax offices (68) and some densely populated jamoats Service Centers provide help on consultation to taxpayers, who has difficulties with submitting their electronic tax Comments declarations. Modernize, strengthen and implement the system of continuous in-service training and on-job mentorship with Action Description specific focus on women promotion, including development and implementation of action plan on tax staff ICT capacity building Source DLI# Responsibility Timing Timing Value Status DLI 5 Annually throughout Environmental and Social TC Other the Program In Progress Systems implementation An action plan on ICT capacity building of tax staff is prepared and being implemented. Annual staff capacity Completion Measurement building/training plans are approved, implemented and reported in each tax office. Comments ICT Development Road Map has been approved, which provides for an action plan on capacity building for TC staff. Prepare and implement Taxpayer Communication Plan with strengthened the taxpayer feedback mechanism at the Action Description Call Center and local tax offices. Source DLI# Responsibility Timing Timing Value Status DLI 1 Throughout the Environmental and Social TC Other Program In Progress Systems implementation Taxpayer Communication Plan and Stakeholder Engagement Plan implemented and reported as part of Annual Program Implementation Reports; Completion Measurement Effective GRM is in place in every tax office. Regular GRM reporting Comments TC has submitted information on existing GRM mechanism. Currently, GRM is functioning in all tax offices. Perform a gap analysis of licensed e-waste facilities in Tajikistan against the Bank’s requirements/GIIP prior to Action Description sending e-waste to the facility and update ESMP to include corrective actions to address any identified material issues. Source DLI# Responsibility Timing Timing Value Status Environmental and Social DLI 4 TC/State Property Prior to sending e- Other Not Yet Due Systems Committee waste to the facility Completion Measurement Gap analysis of licensed e-waste facilities in Tajikistan is completed. 1/11/2023 Page 4 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) The ESMP is implemented. The ESMP is implemented. Annual Program Implementation Reports Comments Action Description Implement and report on the ESMP with e-waste management procedures Source DLI# Responsibility Timing Timing Value Status DLI 4 Throughout the Environmental and Social TC Other Program In Progress Systems implementation Completion Measurement Annual Program Implementation Reports Comments The first project Annual Program Implementation Report is expected by end January 2023. Development of standard bidding documents and contract forms for the Program procurement of goods, works, non- Action Description consulting and consulting services Source DLI# Responsibility Timing Timing Value Status No later than 6-months Fiduciary Systems TC Other after the project In Progress effectiveness Completion Measurement TC shares standard bidding documents and contract forms with WB Comments Documents received from the SAPP and sent to the World Bank for consideration. Prepare a capacity building and training plan, acceptable to the Bank, for improving the TC staff fiduciary capacity. Action Description Dedicated TC staff to complete training and get certified in public procurement and national IA Certification of the MOF Source DLI# Responsibility Timing Timing Value Status No later than 6 months Fiduciary Systems TC Other after the Program Completed effectiveness. Completion Measurement A capacity building and training plan is confirmed acceptable by WB. 1/11/2023 Page 5 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) A Staff Capacity Building Strategy for the Tax Committee has been developed to improve the fiduciary system and Comments will soon be submitted to the management of the Tax Committee, the Ministry of Finance, SAPP, and also to the World Bank for consideration The MoF to ensure for each fiscal year under the Program that the originally approved (revised) budget funding for Action Description activities that are supported by the PforR is set at least at a level of the actual TC commitment under respective budget lines. Source DLI# Responsibility Timing Timing Value Status During the budget approval (revision) Fiduciary Systems MoF Other cycle for the Borrower’s In Progress each fiscal year under the Program. Completion Measurement MoF confirms to WB allocation of budget funding annually. Comments MoF confirmed allocation of budget funding for FY 23. An independent private auditor, acceptable to the Bank, procured by the MoF to conduct audit of first two years of Action Description Program implementation. Source DLI# Responsibility Timing Timing Value Status First two years of the Fiduciary Systems TC Other Program Not Yet Due implementation Completion Measurement Annual audits completed and submitted to the World Bank within six months after the end of the audit period. Since the project account was closed (due to lapsed loans issue) and there was no disbursement, no audit has been Comments conducted. The first audit is expected in April 2023. SAPP to establish a mechanism to check, before contract award under the Program, the World Bank’s debarment Action Description (www.worldbank.org/debarr) and temporary suspension lists to avoid awarding to firms or individuals on the debarred list Source DLI# Responsibility Timing Timing Value Status No later than 6 months Fiduciary Systems SAPP Other after the project In Progress effectiveness Completion Measurement Copy of audit reports submitted to the Bank. Since the project account was closed (due to lapsed loans issue) and there was no disbursement, no audit has been Comments conducted. The first audit is expected in April 2023. TC publishes annual Procurement Plans at the beginning of each fiscal year and conducts business outreach and Action Description market sounding events before launching tenders 1/11/2023 Page 6 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Source DLI# Responsibility Timing Timing Value Status Throughout the Fiduciary Systems TC Other Program Completed implementation Completion Measurement Evidence of published Procurement Plans at the beginning of TC fiscal year. Completed on March 1, 2022 Comments The Procurement Plan for the PforR has been published on the TC websites (andoz.tj) and will be updated on an ongoing basis every year. TC payments processed according to the contract conditions but not later than 3 months after fulfilment of Action Description contractors/suppliers/consultants contractual obligations. TC to ensure that all accounts payable are closed and there are no overdue payables. Source DLI# Responsibility Timing Timing Value Status Throughout the Fiduciary Systems TC Other Program In Progress implementation Completion Measurement TC confirms to WB during implementation support missions Comments There is no delays with paying to the project suppliers. Enhanced use of functionalities of online complaint module at the SAPP web portal to address received procurement Action Description related complaints under the Program. Regular monitoring by TC of status of complaints review and resolution Source DLI# Responsibility Timing Timing Value Status Throughout the Fiduciary Systems TC Other Program Completed implementation Completion Measurement TC confirms to WB during implementation support missions Comments Completed in June 2022. Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Substantial Substantial Substantial 1/11/2023 Page 7 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Moderate Moderate Moderate Institutional Capacity for Implementation and Moderate Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Moderate Moderate Moderate Stakeholders Moderate Moderate Moderate Other Moderate -- -- Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Simplified Tax System IN01238982 ►Selected preferential tax and customs incentives eliminated (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The new Tax Code of The new Tax Code of the the Republic of Republic of Tajikistan Tajikistan (which was (which was approved by approved by the the Government on Government on Tax incentives September 2, 2021 and September 2, 2021 and eliminated under each ratified and finally ratified and finally of the following endorsed with Resolution endorsed with preferential tax No. 217 of Majlisi Milli of Resolution No. 217 of regimes for the new Majlisi Oli of the Republic Majlisi Milli of Majlisi Oli taxpayers: A new edition of the Tax of Tajikistan on of the Republic of Code is developed and December 17, 2021) Tajikistan on December (a) Construction of adopted. The eliminated the incentives 17, 2021) eliminated the hydro power plants (for amendments to the Tax Value associated with the incentives associated the investor, general Code propose to eliminate construction of with the construction of contractor and at least 14 incentives, hydroelectric power hydroelectric power suppliers) (10 related to two preferential plants (Chapter 46) and plants (Chapter 46) and incentives); (b) Supply tax regimes. persons benefitting from persons benefitting from of manufactured the right to apply for the right to apply for products by the incentives in the incentives in the investor implementing implementation of implementation of a production sharing production sharing production sharing agreement (4 agreements (Chapter agreements (Chapter incentives). 48), which provided for 48), which provided for exemption from payment exemption from of 14 taxes and duties. payment of 14 taxes and duties. Date 31-Mar-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The target is achieved. Comments Improved Quality of Taxpayer Services IN01238984 1/11/2023 Page 8 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) ►(a) Taxpayer satisfaction with the quality of selected available taxpayer electronic services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 84.19 86.20 86.20 89.00 Date 12-Mar-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 This indicator was calculated as the average percentage of respondents satisfied, that is, having rated their level of satisfaction as 4 or 5 on a scale of 1 to 5 with the 3 available services tracked in the survey and listed below. At baseline, satisfaction with 3 existing available services are tracked . At mid and end line, 3 Comments available and new services will be tracked. Currently, the following services are measured under this indicator: e-payments of taxes, electronic labeling of goods, and electronic appeals. IN01238985 ►(b) Taxpayer satisfaction with the quality of selected available taxpayer electronic services - women (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 85.96 85.10 85.10 89.00 Date 30-Sep-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 This indicator measures women taxpayer satisfaction with the quality of selected available taxpayer electronic services. See definition of the indicator (a) Taxpayer satisfaction with the quality of Comments selected available taxpayer electronic services. IN01238986 ►(c) Taxpayer satisfaction with the quality of selected new taxpayer electronic services (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 87.50 87.50 84.19 Date 12-Mar-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 This indicator was calculated as the average percentage of respondents satisfied, that is, having rated their level of satisfaction as 4 or 5 on a scale of 1 to 5 with 3 new services tracked in the survey and listed below. At baseline, new services were not measured as they did not exist. At mid and end line, new services will be Comments tracked too. The following services are measured under this indicator: New services: Registration of cash registers in electronic format, VAT refund, and E-assistant for all taxpayers (filing declaration, calculate taxes, payment of taxes etc.). IN01238987 ►(d) Taxpayer satisfaction with the quality of selected new taxpayer electronic services - woman (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 89.60 89.60 84.19 Date 30-Sep-2022 30-Sep-2022 21-Dec-2022 30-Sep-2026 This indicator measured women taxpayer satisfaction with the quality of selected new taxpayer electronic services. See definition of the indicator (a) Taxpayer satisfaction with the quality of selected new taxpayer Comments electronic services. Improved Voluntary Compliance IN01238983 ►VAT Compliance Gap (Percentage, Custom) 1/11/2023 Page 9 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Baseline Actual (Previous) Actual (Current) End Target Value 45.90 45.90 45.90 33.40 Date 30-Oct-2020 30-Sep-2022 30-Sep-2022 30-Sep-2026 The indicator measured the difference between the total potential VAT revenues (net of refunds) if 100% of taxpayers are compliant, and percentage of total observed VAT revenue collected (net of refunds). The gap is expressed as a percentage of potential revenue. Note^ It should be noted that regarding the Gap in Comments Compliance with VAT, an analysis is currently underway to finalize the revision presented by the World Bank and is being approved by the TC management, further analysis information will be provided, taking into account the rate reduction. It is expected that this information will be provided by end February 2023. Intermediate Results Indicators by Results Areas 1. Simplified Tax System IN01238989 ►1.1 Regulatory foundations for improvement of the tax system established (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The Recipient’s Government should issue official instructions for MoF, TC and other relevant ministries and agencies to develop DLR 2.1 was achieved. and approve the DLR 2.2 is under required secondary implementation. 31 out of regulations under the The new edition of the Tax 96 secondary regulations The Recipient has new Tax Code. Code is developed and required under the new drafted, approved and At the moment, the Tax consulted but not Tax Code have been published on one of Committee under the approved. There are no drafted and approved. the official web-sites Value Government of the secondary regulations in TC, in consultation, with the secondary Republic of Tajikistan, place to support MoF to identify the list of regulations required in agreement with the implementation of the new essential secondary under the new Tax Ministry of Finance of Tax Code. regulations required to Code. the Republic of implement the new Tax Tajikistan, has Code and share with the developed and Bank. approved 58 legal acts arising from the Tax Code in a new edition. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 Achieved. Comments IN01238992 ►1.2 Improved transparency of tax expenditure (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Tax expenditure report is Tax expenditure report is Tax expenditure report Tax expenditure report not prepared and prepared, but it has not is prepared, but it has is published with the Value published with the annual been published. Cost- not been published. annual draft budget draft budget that is benefit analysis of Cost-benefit analysis of that is submitted to submitted to Parliament. selected tax incentives/ selected tax incentives/ Parliament. Cost- 1/11/2023 Page 10 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Cost-benefit analysis of exemptions is not exemptions is not benefit analysis of selected tax incentives/ conducted. conducted. selected four tax exemptions is not incentives/ exemptions conducted. is conducted and published with the draft annual republican budget. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The report has been developed, but is not published yet. MoF informed that they have to discuss the issue Comments with the government. It is expected that the report will be published in March 2023. IN01238995 ►1.3 Rules for tax and financial accounting reporting for CPT and VAT are harmonized (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Analysis of international Analysis of international standards for standards for establishing tax base in establishing tax base in tax and financial tax and financial New harmonized rules Rules for establishing a accounting reporting for accounting reporting for for establishing a tax tax base in tax and CPT and VAT is CPT and VAT is base in tax and Value financial accounting completed. completed. financial accounting reporting for CPT and VAT Contradictions in the Contradictions in the reporting for CPT and are not harmonized. rules for establishing a rules for establishing a VAT are enforced. tax base in tax and tax base in tax and financial accounting financial accounting reporting for CPT and reporting for CPT and VAT are being identified. VAT are identified. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 Achieved. Comments IN01238998 ►1.4 Percentage of MoF and TC professional staff in tax policy and intelligence functions trained on key tax policy analysis functions, including revenue forecasting, tax policy and data analytics (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 95.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 TC is finalizing the Action Plan, which will address all the above issues. Comments IN01239002 o/w women (percentage of all women in tax policy and intelligence functions) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 IN01239003 ►1.5 Improved representation of women in management positions in TC workforce (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value Women in managerial An action plan to address Women in leadership Women in managerial positions out of all staff in gender gap in TC positions in the TC positions out of all staff TC managerial positions workforce has been make up about 7 in TC managerial comprise 7.8 percent only. developed and approved percent of the total 1/11/2023 Page 11 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) by the Chairman of the number of employees in positions comprise TC in February 2022. senior positions. 11.00 percent. Implementation is in progress. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 An action plan to address the gender gap in TC workforce has been developed and approved by TC management. This IRP (component) is being implemented as part of the Action Plan to eliminate the gender gap in leadership positions in the NC staff, which was approved by the order of the NC No. 118 dated February 23, 2022 Comments A female manager has been appointed to the Tax Committee to implement the Action Plan to close the gender gap in the leadership of the Tax Code Order dated January 27, 2022, No. 64-F / 2. Improved Quality of Taxpayer Services IN01238988 ►2.1 Development and Implementation of a Modern ICT Governance Model (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target A new ICT governance model has been developed and approved by the internal regulation. A plan for the A plan for the implementation of the implementation of the development of an development of an automated tax The ICT department automated tax The ICT department does administration system operates based on a administration system not have an ICT (ICT) for 2020-2025 modern ICT for 2020-2025 within the Value governance model or ICT within the framework of governance model with framework of the infrastructure upgrade the Project has been up to date Project has been plan. developed, information infrastructure. developed, information on the progress of on the progress of execution by periods will execution by periods be provided additionally. will be provided additionally. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the upgrade of the ICT infrastructure. Implementation will require that a new governance model for ICT department of the TC is developed and approved by the internal regulation. The ICT governance model will include staffing number with skills requirements necessary to support the model Comments and ICT Infrastructure Upgrade Plan. ICT infrastructure will be upgraded by the end of the Program and local offices are to be connected to Tax Committee ICT infrastructure for video conferencing and training. IN01238991 ►2.2 Number of services reengineered / automated at Level 3 or 4 according to the United Nations (UN) four-stage maturity model of e- Government within the project (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 6.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 1/11/2023 Page 12 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) TC has hired a consulting firm, which is helping with achieving this indicator. The first results are expected Comments by end May 2023. IN01238994 ►2.3 Number of TC offices equipped with the terminals for submission of e-declaration (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 30.00 39.00 39.00 70.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the number of TC offices, where terminals for submission of e-declaration, procured Comments under the project, will be installed. IN01238997 ►2.4 Percentage of taxpayers out of all registered taxpayers in the taxpayer group, submitting declaration electronically disaggregated by legal entities and individual entrepreneurs (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 63.85 63.85 63.85 78.50 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the average percentage of: (a) Legal entities out of all registered legal entities as taxpayers, submitting declaration electronically and (b) Individual entrepreneurs out of all registered Comments individual entrepreneurs as taxpayers, submitting declaration electronically. IN01239000 ►2.5 Percentage of TC professional staff in taxpayer services and compliance functions, trained in use of e-applications for taxpayer services, reengineered and automated under the Project (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 95.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator will start reporting from September 2024. It will measure the percentage of staff occupying professional positions in taxpayer services and compliance functions in TC central office, contact center, local Tax Offices, out of all staff in professional positions in taxpayer services and compliance functions in TC central office, contact center and local Tax Offices, trained in the use of e-applications for taxpayer Comments services, reengineering and automated under the project. The lists of relevant staff will be approved by the TC management annually. By the end of the project the target is to train 95 percent of the identified relevant staff. IN01239005 o/w women (percentage of all women taxpayer services and compliance functions) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 50.00 Date 31-Jan-2021 30-Sep-2022 30-Sep-2022 30-Sep-2026 IN01239006 ►2.6 Number of hours required for filing tax reporting (DB indicator) (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 224.00 224.00 224.00 180.00 1/11/2023 Page 13 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the administrative burden of paying 3 major taxes (social contributions, CIT and VAT) for medium size companies, expressed in time (number of hours) required for paying taxes and contributions and complying with post filing procedures (VAT refund and tax audit). Since DB discontinued Comments now, the project and WB has agreed that during the project mid-term review to cancel or reformulate this indicator. IN01239008 ►2.7 Taxpayer Service Standards have been enhanced and based on taxpayer feedback (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Taxpayer feedback mechanism is established and functional in the Taxpayer Contact Quality of taxpayer Quality of taxpayer Center. Taxpayer Quality of taxpayer service service is regulated by a service is regulated by a feedback mechanism is regulated by a Unified Unified Standard for Unified Standard for is functional in the Standard for Taxpayer Taxpayer Service (the Taxpayer Service (the Taxpayer Contact Service (the Standard), Standard), enacted in Standard), enacted in Center. Annual reports enacted in 2017. 2017. Implementation of 2017. Implementation of on taxpayer feedback, Value Implementation of the the Standard is not the Standard is not collected through the Standard is not monitored. monitored. There is no monitored. There is no taxpayer feedback There is no system for system for monitoring system for monitoring mechanism, are monitoring and and continuously and continuously published at TC continuously enhancing enhancing taxpayer enhancing taxpayer website. A Unified taxpayer services. services. services. Standard for Taxpayer Service is revised based on taxpayer feedback. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator will measure achievements of DLI 6 and DLR 6.1 and is expected to achieve its targets Comments by September 2024. 3. Improved Voluntary Compliance IN01238990 ►3.1 Reduced burden of tax audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Based on the specified order of the Tax Code, At least 90% of field a new module, "Risk audits of large The Bank team was Management", was taxpayers (i.e. Audits are not risk-based. informed that a tax introduced in the taxpayers with annual Risk-based selection expenditure report has Integrated Tax turnover above 25 methodology is been prepared by the Management million Somoni) during Value developed, but not Ministry of Finance Information System of the Government consistent with (MoF). The report, the Tax Committee financial year are international approaches. according to the MoF, is (ITMIS), which analyzes conducted for cases extensive and is not and studies the selected by the risk- published yet. activities of taxpayers based selection tool. according to certain criteria. The module will serve as the basis for 1/11/2023 Page 14 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) developing the risk- based selection tool. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator will be measured through the implementation and achievements of DLR 4.1 and DLR 4.2. DLR 4.1 is expected to achieve its targets by September 2023. DLR 4.1 - the TC shall have approved the risk assessment methodology enhanced based on relevant Comments international experience. DLR 4.2 - 90 percent of field audits of large taxpayers are conducted for cases selected by the risk-based selection tool between October 1, 2023 – September 30, 2026. IN01238993 ►3.2 Coverage of corporate taxpayers with annual turnover above 25 million Somoni by Tax Monitoring Program (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target According to the Order of the Chairman of the Tax Committee, A concept for tax monitoring and monitoring is not Tax monitoring is not accounting of taxpayers Tax Monitoring developed yet. There are conducted. with an annual turnover Program is fully 4,551 corporate of more than 25 million operational and covers taxpayers with annual There are 242 corporate somoni will begin from 10 percent of legal turnover above 25 million Value taxpayers with annual January 01, 2023, since entities out of all Somoni as of September turnover above 25 million the legislation (new registered corporate 30, 2022. 349 of them Somoni as of September editions of the Tax taxpayers with annual are included in tax 1, 2020. Code) provides time for turnover above 25 monitoring program, the submission of an million Somoni. which is 7.7 percent of application until July 1, total. and consideration of the application by the tax authority until Nov. 1 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 This composite indicator measures the development and institutionalization of Tax Monitoring Program for corporate taxpayers with annual turnover above 25 million Somoni. In Years 1-2 this will include the development of the Concept for tax monitoring and mechanisms of information exchange between TC and taxpayers, the development and the approval of the methodology for assessing reliability of taxpayer Comments information, the piloting of the Tax Monitoring Program and the approval of the regulation, introducing tax monitoring process and Program. In Years 3-5 of the project the indicator will measure the percentage of legal entities, covered by Tax Monitoring Program, out of all registered corporate taxpayers. IN01238996 ►3.3 Percentage of mass desk audits launched out of total number of audits launched during the financial year (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 31.00 31.00 40.00 75.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the percentage of mass desk audits as a share of the sum of all audit, launched Comments during the GoT financial year. IN01238999 ►3.4 Percentage of VAT refunds processed using risk-based verification or fast track procedures between October 1, 2023 – September 30, 2026. (Text, Custom) 1/11/2023 Page 15 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Baseline Actual (Previous) Actual (Current) End Target 95 % of VAT refunds out of all VAT refunds Risk criteria or fast track Risk criteria or fast track Risk criteria or fast track during the Government procedure are not used procedure are not used Value procedure are not used for financial year are for verification of VAT for verification of VAT verification of VAT refund. processed using risk- refund. refund. based verification or fast track procedures. Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 This indicator will be measured starting from September 2024. From the baseline of 0.95 percent of VAT refunds out of all VAT refunds during the Government financial year are processed using risk-based Comments verification or fast track procedures. IN01239001 ►3.5 Percentage of active taxpayers in the total number of taxpayers registered (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 70.10 73.00 73.00 90.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the percentage of active taxpayers (taxpayers, submitted tax declaration in the Government financial year) as a share of all registered taxpayers, including legal entities, branches and Comments representative offices of foreign legal entities, individual entrepreneurs, dekhkan farms. IN01239004 ►3.6 Percentage of TC professional staff in compliance risk management and tax audit functions trained in risk management, risk-based audits, and arrears management (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.00 54.00 54.00 95.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 The indicator measures the percentage of staff occupying professional positions in compliance risk management and audit functions out of all staff in professional positions in compliance risk management and audit functions in TC, trained in risk management, risk-based audits and arrear management. The lists Comments of relevant staff will be approved by the TC management annually. By the end of the project the target is to train 95 percent of the identified relevant staff. IN01239007 o/w women (Percentage of all women in compliance risk management and audit functions) (Percentage, Custom Breakdown) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 25.00 25.00 50.00 Date 31-Jan-2021 30-Sep-2022 21-Dec-2022 30-Sep-2026 Disbursement Linked Indicators DLI_IND_TABLE ►DLI 1 Selected preferential tax and customs incentives eliminated (Intermediate Outcome, 3,750,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 1/11/2023 Page 16 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Achieved. The new Tax Achieved. The new Tax Code of the Republic of Code of the Republic of Tajikistan was approved Tajikistan was approved by the Government on by the Government on September 2, 2021 and September 2, 2021 and A new edition of the Tax ratified and finally ratified and finally Code is developed and endorsed with Resolution endorsed with Resolution consulted. The No. 217 of Majlisi Milli of No. 217 of Majlisi Milli of amendments to the Tax Majlisi Oli of the Republic Majlisi Oli of the Republic Value N/A Code propose to eliminate of Tajikistan on of Tajikistan on December at least 14 incentives, December 17, 2021. It’s 17, 2021. It’s currently related to two preferential currently available on the available on the Tax tax regimes. Tax Committee website: Committee website: www.andoz.tj. The Bank www.andoz.tj. The Bank confirmed the results confirmed the results achievement of DLI/DLR achievement of DLI/DLR 1 1 through a letter dated through a letter dated January 17, 2022. January 17, 2022. Date -- 30-Sep-2022 21-Dec-2022 -- Comments ►DLI 2 Regulatory foundations for improved tax system established (Intermediate Outcome, 7,500,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Significant progress has been made in drafting, approving, and publishing the secondary regulations/complementar The new edition of the Tax y regulations required to Code is developed, implement the tax code. consulted and expected to DLR 2.1 is achieved and Out of 96 by-laws be approved by the disbursed. DLR 2.2 is identified by the Government by the under implementation. 31 government, 85 have Program effectiveness. out of 96 secondary already been drafted. The There are no secondary regulations have been team was informed that to regulations in place to drafted and approved as date 58 have already been Value support implementation of N/A of June 2022. TC and approved and published the new Tax Code. The MOF will identify the list on the website. It is also Government Plan of the of essential secondary worth mentioning that all Regulatory Acts to be regulations to implement over the country a Approved under the New the new tax code and taxpayers’ awareness Edition of the Tax Code, is share with the Bank. campaign is in place to drafted and expected to be disseminate the tax code finalized by the Tax Code and complementary approval. regulations. This includes reaching out to social media and mass media to further disseminate and interpret tax legislation. Date -- 30-Sep-2022 21-Dec-2022 -- Comments ►DLI 3 Improved transparency of tax expenditure (Intermediate Outcome, 7,500,000.00, 0%) 1/11/2023 Page 17 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 WB team was informed Tax expenditure report is that a tax expenditure not prepared and published report was prepared by See DLIs (DLRs) Value with the annual draft budget Not yet due. the Ministry of Finance 3.1 and 3.2 that is submitted to (MoF), but it has not been Parliament. published yet. Date -- 30-Sep-2022 21-Dec-2022 -- The tax code removed some tax benefits, and the operation aspires for improving the transparency of tax incentives as indicated by publishing annually a tax expenditure report and conducting a cost-benefit analysis of selected tax incentives. A starting point is the tax gap analysis recently conducted by the WB where the size of the tax policy gap is estimated. Prior to making a decision regarding the potential removal of a tax benefit, it Comments is recommended to initiate a gradual process of comprehensive and systematic evaluation of tax expenditures as a policy instrument. An evaluation of this nature considers the objective of and justification for government intervention, its potential beneficiaries, and alternative policy interventions such as budgetary outlays or regulation. It also includes a careful evaluation of the costs and benefits of intervention. IN01239012 DLI 3.1 Tax expenditure report is published with the annual draft budget that is submitted to Parliament (Output, 3,000,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 DLR 3.1. Tax WB team was informed Tax expenditure report is expenditure report is that a tax expenditure not published with the published with the Value Not yet due. report was prepared by annual draft budget that is annual draft budget MoF, but it has not been submitted to Parliament. that is submitted to published yet. Parliament. Date -- 30-Sep-2022 21-Dec-2022 -- The tax code removed some tax benefits, and the operation aspires for improving the transparency of tax incentives as indicated by publishing annually a tax expenditure report and conducting a cost-benefit analysis of selected tax incentives. A starting point is the tax gap analysis recently conducted by the WB where the size of the tax policy gap is estimated. Prior to making a decision regarding the potential removal of a tax benefit, it is recommended to initiate a gradual process of comprehensive and systematic evaluation of tax expenditures as Comments a policy instrument. An evaluation of this nature considers the objective of and justification for government intervention, its potential beneficiaries, and alternative policy interventions such as budgetary outlays or regulation. It also includes a careful evaluation of the costs and benefits of intervention. IN01239013 DLI 3.2 Cost-benefit analysis of selected tax incentives/ exemptions is conducted and published with the draft annual republican budget (Output, 4,500,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Value Cost-benefit analysis of Not yet due. Not yet due. DLR 3.2. Cost- selected tax incentives/ benefit analysis of exemptions is not four targeted tax conducted. incentives/ exemptions is conducted and 1/11/2023 Page 18 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) published with the draft annual republican budget. Date -- 30-Sep-2022 21-Dec-2022 -- Comments ►DLI 4 Reduced burden of tax audit (Intermediate Outcome, 5,500,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Audits are not risk-based. Value Not yet due. Not yet due. See DLI (DLR) 4.2 Date -- 30-Sep-2022 21-Dec-2022 -- Comments IN01239015 DLI 4.1 The TC shall have approved the risk assessment methodology enhanced based on relevant international experience (Output, 1,000,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Risk assessment methodology is developed, Value but is not consistent with Not yet due. Not yet due. N/A modern tax administration approaches. Date -- 30-Sep-2022 21-Dec-2022 -- Comments IN01239016 DLI 4.2 90% of field audits of large taxpayers are conducted for cases selected by the risk-based selection tool between October 1, 2023 – September 30, 2026 (Output, 4,500,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Value Audits are not risk-based. Not yet due. Not yet due. DLR 4.2. At least 90% of field audits of large taxpayers (i.e. taxpayers, registered in TC Large Taxpayers Directorate and regional TC offices for large taxpayers) during the Government financial year are conducted for cases 1/11/2023 Page 19 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) selected by the risk- based selection tool. Date -- 30-Sep-2022 21-Dec-2022 -- Comments ►DLI 5 Percent of VAT refunds processed using risk-based verification or fast track procedures between October 1, 2023 – September 30, 2026 (Outcome, 7,500,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 95 % of VAT refunds out of all VAT refunds during Risk criteria or fast track the Government Value procedure are not used for Not yet due. Not yet due. financial year are verification of VAT refund. processed using risk-based verification or fast track procedures. Date -- 30-Sep-2022 21-Dec-2022 -- Comments ►DLI 6 Taxpayer Service Standards have been enhanced and based on taxpayer feedback (Intermediate Outcome, 3,750,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Quality of taxpayer service is regulated by a Unified Standard for Taxpayer Service (the Standard), enacted in 2017. Value Implementation of the Not yet due. In progress. See DLI (DLR) 6.2 Standard is not monitored. There is no system for monitoring and continuously enhancing taxpayer services. Date -- 30-Sep-2022 21-Dec-2022 -- TC is developing ToR for this activity Comments IN01239019 DLI 6.1 Taxpayer feedback mechanism has been established and functional in the Taxpayer Contact Center (Intermediate Outcome, 1,000,000.00, 0%) Unit of Measure: Yes/No Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Value No No Yes Yes Date -- 30-Sep-2022 21-Dec-2022 -- 1/11/2023 Page 20 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) Taxpayers’ feedback on tax services provided by the tax administration. The TC has a Call Center in place that receives feedback from taxpayers on a regular basis. The TC has also put in place a Hotline where taxpayers can complain or submit information requests. Overall, including the Call-Centers, chats, emails, or the Hotline, Comments the TC has received in 2022 so far around 20,900 complains/requests. IN01239020 DLI 6.2 Annual reports on taxpayer feedback, collected through the taxpayer feedback mechanism, has been published on TC website annually between October 1, 2024 – September 30, 2026. (Intermediate Outcome, 1,000,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 DLR 6.2. Annual reports on taxpayer There is no system for feedback, collected monitoring and through the taxpayer Value Not yet due. Not yet due continuously enhancing feedback taxpayer services. mechanism, has been published on TC website. Date -- 30-Sep-2022 21-Dec-2022 -- Comments IN01239021 DLI 6.3 A Unified Standard for Taxpayer Service has been revised based on taxpayer feedback and published on TC website between October 1, 2023 – September 30, 2024. (Intermediate Outcome, 1,750,000.00, 0%) Unit of Measure: Yes/No Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Value No No No No Date -- 30-Sep-2022 21-Dec-2022 -- The work is expected to start by the end 2023. Comments ►DLI 7 Improved representation of women in management positions in TC workforce (Intermediate Outcome, 2,000,000.00, 0%) October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Women in managerial positions out of all staff in Value Not yet due. 7% See DLI (DLR) 7.2 TC managerial positions comprise 7.8 percent only. Date -- 30-Sep-2022 21-Dec-2022 -- An action Plan is approved and being implemented. Comments IN01239023 1/11/2023 Page 21 of 22 The World Bank Implementation Status & Results Report Tax Reform Operation (P171892) DLI 7.1 An action plan to address gender gap in TC workforce has been developed and approved by TC management between October 1, 2021 – September 30, 2022. (Intermediate Outcome, 750,000.00, 0%) Unit of Measure: Yes/No Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 Value No No Yes No Date -- 30-Sep-2022 21-Dec-2022 -- An action plan is approved and being implemented. Comments IN01239024 DLI 7.2 Representation of women in TC managerial positions increased to 11% by September 30, 2026. (Intermediate Outcome, 1,250,000.00, 0%) Unit of Measure: Text Indicator Type: October 1, 2025 - Baseline Actual (Previous) Actual (Current) September 30, 2026 DLR 7.2. Woman in Women in managerial TC managerial positions out of all staff in positions out of all Value Not yet due. 7% TC managerial positions staff in managerial comprise 7.8 percent only. positions comprise 11%. Date -- 30-Sep-2022 21-Dec-2022 -- A lot of work has been done on gender balance, especially in terms of hiring women and having more women at a managerial level. In this regard, TC is working in close collaboration with the National University. Currently around 12.3 percent of the total staff of the TC are women (221 women including 23 in managerial positions). The TC pointed to a research that was recently conducted by the Asian Development Bank (ADB) in the region where the revenue administration of Tajikistan has the higher percentages of women. While recognizing Comments progress in this area, it is important to continue moving in this direction to increase the percentage of women working in the institution especially in managerial positions in alignment with the indicators included in the project. The TC has developed the gender action plan, which the Bank provided comments on December 7, 2022 1/11/2023 Page 22 of 22