The World Bank Implementation Status & Results Report
Tax Administration Modernization Project (P127734)
Tax Administration Modernization Project (P127734)
EUROPE AND CENTRAL ASIA | Moldova | Governance Global Practice |
IBRD/IDA | Investment Project Financing | FY 2016 | Seq No: 6 | ARCHIVED on 08-Oct-2019 | ISR38457 |
Implementing Agencies: The Ministry of Finance, The State Tax Service
Key Dates
Key Project Dates
Bank Approval Date: 06-Jun-2016 Effectiveness Date: 25-Jan-2017
Planned Mid Term Review Date: 30-Sep-2020 Actual Mid-Term Review Date:
Original Closing Date: 31-Dec-2021 Revised Closing Date: 30-Nov-2023
pdoTable
Project Development Objectives
Project Development Objective (from Project Appraisal Document)
To improve revenue collection, tax compliance and taxpayer services in the Republic of Moldova
Has the Project Development Objective been changed since Board Approval of the Project Objective?
No
Components Table
Name
Institutional development:(Cost $0.65 M)
IT Infrastructure and system modernization:(Cost $15.76 M)
Project management and change management:(Cost $0.59 M)
RBF:(Cost $3.00 M)
Overall Ratings
Name Previous Rating Current Rating
Progress towards achievement of PDO ►Moderately Unsatisfactory ►Moderately Satisfactory
Overall Implementation Progress (IP) ►Moderately Unsatisfactory ►Moderately Satisfactory
Overall Risk Rating ►Substantial ►Substantial
Implementation Status and Key Decisions
The project became effective on January 25, 2017. The project is meant to support the implementation of an automated risk-based approach to maximize revenue collection,
promote open interaction with taxpayers, and develop a fair, taxpayer-friendly approach to addressing taxpayer grievances. This will allow the State Tax Service (STS) to
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The World Bank Implementation Status & Results Report
Tax Administration Modernization Project (P127734)
focus on non-compliant taxpayers, including businesses that avoid paying taxes while reducing compliance costs for taxpayers. The project will also finance the acquisition
of a modern revenue management IT system. The long-term vision supported by the project is the creation of client-oriented tax administration. The modernized tax
administration will improve the business environment and the country's competitiveness. Implementation of the project was delayed due to insufficient project staffing and
delays in decisions about how to go forward with the IT system. In 2018, the STS established a designated Project Implementation Division and conducted a Feasibility
Study on possible solutions for the Integrated Tax Management System (ITMS), which was positively evaluated by an independent international consultant. Based on that,
the Project restructuring has been completed. TAMP restructuring includes an extension of the Project closing date by 23 months to complete and operationalize the ITMS
and the introduction of a new Results-based Financing (RBF) Component with the revision of the Results Framework (RF). The Government of Moldova co-signed Letters
on Amendments to the Loan and Financial Agreements on August 2, 2019, and now these are subject to Parliamentary ratification.
Risks
Systematic Operations Risk-rating Tool
Risk Category Rating at Approval Previous Rating Current Rating
Political and Governance ►High ►Substantial ►High
Macroeconomic ►High ►High ►Substantial
Sector Strategies and Policies ►Substantial ►Substantial ►Substantial
Technical Design of Project or Program ►Substantial ►Substantial ►Low
Institutional Capacity for Implementation and Sustainability ►Substantial ►High ►Substantial
Fiduciary ►Substantial ►Substantial ►Substantial
Environment and Social ►Low ►Low ►Low
Stakeholders ►Moderate ►High ►Substantial
Other -- -- --
Overall ►Substantial ►Substantial ►Substantial
Results
PDO Indicators by Objectives / Outcomes
To improve revenue collection
IN00740798
►Overall efficiency of VAT collection (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 52.30 49.60 51.34 54.70
Date 31-Dec-2015 31-Dec-2018 01-Jul-2019 31-Dec-2021
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Tax Administration Modernization Project (P127734)
Data submitted for 3 months 2019, according to the available information published by the National Bureau of Statistics.
Comments: The indicator is on track.
IN00740898
►DLI: Increased nominal value of the Specific and Minimal Excise Rates for all tobacco products under tariff position 240220 (Text, Custom, DLI)
Baseline Actual (Previous) Actual (Current) End Target
Specific rates and minimum
excise rates by types of
Increased specific rates
Value tobacco products as set up in n/a n/a
came into effect.
the Tax Code of Moldova in
2017
Date 31-Dec-2018 29-Mar-2019 10-Sep-2019 03-Jan-2022
This is a new disbursement linked indicator (DLI 1) for the RBF Component resulted from Project restructuring. This DLI
is aimed at reflecting the implementation of the tax policy reform actions supported by the RBF component. DLI 1 includes
Comments: 3 disbursement linked results. Achievement of this DLI is expected to contribute to improving tax collection.
The STS will report on this indicator once the restructured project becomes effective.
IN00740901
►DLI: Ensured that supplies of goods by insolvent subjects have been taxed with VAT on the reverse charge principle. (Text, Custom, DLI)
Baseline Actual (Previous) Actual (Current) End Target
Due to the legal gap in
provisions which stipulates
the process of debt
The adopted changes to
cancellation, at the time
Value n/a n/a the Tax Code came into
transfer of collected VAT
effect.
insolvent subject does not
have liquidity and this creates
budget losses.
Date 31-Dec-2018 29-Mar-2019 10-Sep-2019 31-Dec-2020
This is a new Disbursement Linked Indicator (DLI 2) for the RBF Component introduced as a result of Project
restructuring. This DLI 2 is aimed at reflecting the tax policy reform implementation under the RBF Component and shall
Comments: contribute to improving revenue collection. DLI 2 has 2 disbursement linked results.
The STS will report on this indicator once the restructured project becomes effective.
To improve tax compliance
IN00740799
►Share of active taxpayers (legal entities) filing income declarations in total registered taxpayer (legal entities) (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 19.35 0.00 83.90 90.00
Date 31-Dec-2015 31-Dec-2018 31-Dec-2018 30-Nov-2023
The income tax returns are submitted annually by the legal entities to the State Tax Service no later than March 25 of the
Comments: year following the year of administration. Thus, the value of the indicator is presented for the year 2018.
(115,972 tax returns filed 2018 / 138 251 active taxpayers)
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Tax Administration Modernization Project (P127734)
As the result of Project restructuring the indicator has been clarified to focus on legal entities. Also, annual target levels have
been revised upwards. The actual value indicated meets the pre-restructuring target.
IN00740896
►Increase in additional tax assessed per audit (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 0.00 8.70 8.70 34.00
Date 31-Dec-2015 31-Dec-2018 31-Dec-2018 30-Nov-2023
The target level for 2018 year ( +15%) was not achieved ( actual was +8.7%) due to legal changes. The target value for 2019
is + 21%, while actual value for the first semester of 2019 year was -10.87% due to the same reason.
The Law no. 180 of 26.07.2018 On Voluntary Declaration and Tax Incentive significantly limited audits on the
Comments: correctness of the calculation, declaration and payment of taxes, duties and other payments related to NPB. Those
audits are not allowed anymore for tax periods until 1 January 2018. The annual targets are measured as % increase against
the baseline.
IN00740899
►DLI: Improved the usability of the STS website. (Text, Custom, DLI)
Baseline Actual (Previous) Actual (Current) End Target
There are two websites
available (one for information
only and another one for the New STS website is used
Value submission of tax declarations n/a n/a by the taxpayers
by taxpayers); there are some
gaps in the functionality of
both websites.
Date 31-Dec-2018 29-Mar-2019 10-Sep-2019 31-Dec-2020
This is a new Disbursement linked indicator (DLI 3) for the Results Based Financing Component. This DLI is aimed at
reflecting STS`s efforts to improve compliance under the RBF Component. DLI 3 has two disbursement linked results.
Comments:
The STS will report on this DLI once the restructured project becomes effective.
To improve taxpayer services
IN00740800
►Time required to comply with taxes (Hours, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 186.00 181.00 181.00 165.00
Date 31-Dec-2015 31-Dec-2018 01-Jul-2019 30-Nov-2023
The target level for 2018 year was achieved.
The annual target levels of the indicator have been adjusted during the project's restructuring to reflect the extension of the
Comments:
project's closing date.
IN00740897
►DLI: Strengthened the capacity of STS staff to deliver taxpayer services (Text, Custom, DLI)
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Tax Administration Modernization Project (P127734)
Baseline Actual (Previous) Actual (Current) End Target
The Manual is
implemented and all
There is no a Manual on
eligible staff of STS
Value Taxpayer Services, the staff n/a n/a
located in all offices was
had no specific trainings.
trained
Date 31-Dec-2018 29-Mar-2019 10-Sep-2019 31-Dec-2020
This is a new Disbursement linked indicator (DLI 4) for the Results Based Financing Component. This DLI is aimed at
reflecting STS`s efforts in improving its taxpayer services under the RBF Component. DLI 4 has two Disbursement Linked
Comments: Results.
The STS will report on the indicator once the restructured project becomes effective.
IN00740900
►DLI: Introduced an Electronic Taxpayer Survey Tool (Text, Custom, DLI)
Baseline Actual (Previous) Actual (Current) End Target
The tool is implemented.
No tool for taxpayers’ regular
Value n/a n/a
feedback is in place.
Date 31-Dec-2018 29-Mar-2019 10-Sep-2019 30-Dec-2020
This is a new Disbursement linked indicator (DLI 5) for the Results Based Financing Component. This DLI is aimed at
reflecting STS`s efforts to improve its taxpayer services under the RBF Component. DLI 5 has 2 Disbursement linked
Comments: results.
The STS will report on this indicator once the restructured project becomes effective.
Overall Comments PDO
As the result of Project restructuring the results framework has been revised to include new DLIs/DLRs for the RBF Component and update other results indicators
(name or target levels). This ISR is based on the updated results framework. However, STS continues reporting based on the previous results framework since the
Amendments to the Loan and Financing Agreements co-signed by the GoM on August 2, 2019 have not become effective yet (subject to Parliamentary`s ratification).
Two DLIs reflect the MoF’s achievements in tax policy reform and three DLIs will measure the progress achieved by the STS in strengthening tax administration and
institutional development. All proposed DLIs are scalable and verifiable. As an evidence of achievement of relevant DLRs the MoF will provide appropriate draft
laws, final laws approved by the Parliament and links on the official publications of those documents to the Bank for verification.
Intermediate Results Indicators by Components
Institutional development
IN00740902
►Taxpayer satisfaction (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
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Tax Administration Modernization Project (P127734)
Satisfaction in crease -
20% (compared to
baseline)
Baseline survey
conducted. The baseline is
Legal entities -76,3% and Baseline survey conducted. Final survey conducted
identified as of December
Value Individuals – 69,2%. The baseline is identified as with data disaggregated by
31, 2018. Survey results
of December 31, 2018. gender. Results and
were published on STS
suggested actions of the
website in May 2019.
STS to address weaknesses
are published on the STS
website.
Date 31-Dec-2018 01-Apr-2019 01-Jul-2019 30-Nov-2023
The survey on the assessment of the taxpayers' satisfaction with the services provided by the State Tax Service was finalized
in December 2018 and its results were published on the STS website in May 2019. Satisfaction assessment baseline was
Comments: determined: 76,33% - legal entities and 69,15% - individuals.
During the Project's restructuring annual target values have been adjusted to reflect the project extension.
IN00740904
►The Training Distance Learning System for the most important workflows developed (Text, Custom)
Baseline Actual (Previous) Actual (Current) End Target
All identified distance
learning courses to support
The list of training programs The identified training 4 identified training
Value for the most important
is not identified programs are developed. programs were developed.
workflows are developed
and updated.
Date 31-Dec-2015 31-Dec-2018 01-Jul-2019 30-Nov-2023
Achievement of this indicator will be fully assisted by SIDA whose program includes support in improving methodologies
for estimating and assessing the training needs; and the development of an automated information system in order to
develop and improve the career development of e-learning platform.
US Treasury Advisor provides support in development of specific courses on arrears management, taxpayer services and tax
control.
The identified training programs are developed by STS, including 2 training programs which were developed with US
Comments: Treasury support.
The name of the indicator was specified as a result of project restructuring: The training distance learning system for the
most important workflows developed.
The ongoing SIDA Institutional Cooperation Project (2018-2021) will fully support the achievement of the initially
planned indicator. However, TAMP supported the purchasing of 45video- conferencing equipment items to be used for
distance learning of the STS employees across the whole country.
IN00740905
►Number of hits to the STS web-site (Number (Thousand), Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 3,570,004.00 6,851,424.00 7,831,747.00 7,150,000.00
Date 31-Dec-2015 31-Dec-2018 01-Jul-2019 30-Nov-2023
Comments: The new updated targets for 2018 as well as for 2019 were achieved. The current amount indicated the number of hits in
the first semester 2019.
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Tax Administration Modernization Project (P127734)
As the result of project restructuring, the annual target levels, including the end target, have been increased based on results
achieved in 2018 and in view of project extension. Currently, the reporting on the indicator includes cumulative number of
hits from STS`s two web-sites. Once a single web-site is introduced the reporting will be based on hits to the single STS`s
web-site.
RBF: Support in tax policy and tax administration reforms
IN00740903
►Decrease in tax arrears (Percentage, Custom)
Baseline Actual (Previous) Actual (Current) End Target
Value 8.50 6.70 8.30 6.47
Date 02-Jan-2017 31-Dec-2018 01-Jul-2019 30-Nov-2023
The annual target levels of the indicator have been adjusted during the project restructuring to reflect the project
extension.
Tax arrears at the end of June 2019 - 1 588,2 mil MDL (including fines and penalties); tax revenues collected during 1
Comments: Semester 2019 - 19 153,8 mln. MDL.
Current value is above the updated targets for 2018 and 2019, while it meets the original targets for these years against
which STS reported.
Disbursement Linked Indicators
IN00740906
►DLI 1 DLI: Increased nominal value of the Specific and Minimal Excise Rates for all tobacco products under tariff position 240220 (Text,
Outcome, 700,000.00, 0.00%)
Baseline Actual (Previous) Actual (Current) December 2021
Specific rates and minimum
Specific rates increase
excise rates by types of tobacco
Value n/a n/a came into effect. (DLR
products as set up in the Tax
1.3)
Code of Moldova in 2017
Date -- 29-Mar-2019 10-Sep-2019 --
IN00740907
►DLI 2 DLI: Ensured that supplies of goods by insolvent subjects have been taxed with VAT on the reverse charge principle. (Text, Outcome,
650,000.00, 0.00%)
Baseline Actual (Previous) Actual (Current) December 2021
Due to the legal gap in
provisions which stipulates the
process of debt cancellation, at
Value the time transfer of collected n/a n/a --
VAT insolvent subject does not
have liquidity and this creates
budget losses.
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Tax Administration Modernization Project (P127734)
Date -- 29-Mar-2019 10-Sep-2019 --
IN00740908
►DLI 3 DLI: Improved the usability of the STS website. (Text, Output, 600,000.00, 0.00%)
Baseline Actual (Previous) Actual (Current) December 2021
There are two websites
available (one for information
only and another one for the
Value submission of tax declarations n/a n/a --
by taxpayers); there are some
gaps in the functionality of both
websites.
Date -- 29-Mar-2019 10-Sep-2019 --
IN00740909
►DLI 4 DLI: Strengthened the capacity of STS staff to deliver taxpayer services (Text, Output, 300,000.00, 0.00%)
Baseline Actual (Previous) Actual (Current) December 2021
There is no a Manual on
Value Taxpayer Services, the staff had n/a n/a --
no specific trainings.
Date -- 29-Mar-2019 10-Sep-2019 --
IN00740910
►DLI 5 DLI: Introduced an Electronic Taxpayer Survey Tool (Text, Output, 750,000.00, 0.00%)
Baseline Actual (Previous) Actual (Current) December 2021
No tool for taxpayers’ regular
Value n/a n/a --
feedback is in place.
Date -- 29-Mar-2019 10-Sep-2019 --
Data on Financial Performance
Disbursements (by loan)
Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed
P127734 IBRD-86250 Effective USD 12.58 12.58 0.00 0.00 0.00 0%
P127734 IDA-58290 Effective USD 7.42 7.42 0.00 0.97 6.38 13%
Key Dates (by loan)
Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date
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Tax Administration Modernization Project (P127734)
P127734 IBRD-86250 Effective 06-Jun-2016 28-Jun-2016 25-Jan-2017 31-Dec-2021 30-Nov-2023
P127734 IDA-58290 Effective 06-Jun-2016 28-Jun-2016 25-Jan-2017 31-Dec-2021 30-Nov-2023
Cumulative Disbursements
Restructuring History
Level 2 Approved on 05-Jun-2019
Related Project(s)
There are no related projects.
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