The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) Tax Administration Modernization Project (P163673) EUROPE AND CENTRAL ASIA | Serbia | Governance Global Practice | IBRD/IDA | Investment Project Financing | FY 2019 | Seq No: 3 | ARCHIVED on 09-Dec-2020 | ISR43919 | Implementing Agencies: Serbian Tax Administration, Republic of Serbia Key Dates Key Project Dates Bank Approval Date: 24-Apr-2019 Effectiveness Date: 03-Jul-2019 Planned Mid Term Review Date: 30-May-2022 Actual Mid-Term Review Date: Original Closing Date: 31-Oct-2024 Revised Closing Date: 31-Oct-2024 pdoTable Project Development Objectives Project Development Objective (from Project Appraisal Document) To improve effectiveness of tax collection and lower the compliance burden for taxpayers. Has the Project Development Objective been changed since Board Approval of the Project Objective? No Components Table Name Legal Environment:(Cost $0.81 M) STA Organization and Operations:(Cost $8.20 M) ICT System and Records Management Modernization:(Cost $40.67 M) Project Management and Change Management:(Cost $2.32 M) Overall Ratings Name Previous Rating Current Rating Progress towards achievement of PDO Satisfactory Satisfactory Overall Implementation Progress (IP) Moderately Satisfactory Satisfactory Overall Risk Rating Moderate Moderate Implementation Status and Key Decisions After the ratification of the Project Loan Agreement in the Serbian Parliament, which came into force on May 31, 2019, the Project was declared effective on July 3, 2019. The Serbian Tax Administration (STA) completed putting in place the governance arrangements for project implementation, including setting up the Steering and Advisory Committees and the PIU. Progress on the TAMP has been impacted by COVID-19, which has delayed the Project, as STA staff have been focused on implementing tax administration measures in response to the pandemic. Nevertheless, the STA did manage to initiate activities for two critical interventions – hiring of consultants for e-fiscalization with a draft law delivered which is under public consultation and initiation of procurement procedure for hiring consulting firm for Business Process Reengineering (BPR). 12/9/2020 Page 1 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) Risks Systematic Operations Risk-rating Tool Risk Category Rating at Approval Previous Rating Current Rating Political and Governance Substantial Moderate Moderate Macroeconomic Moderate Substantial Substantial Sector Strategies and Policies Moderate Moderate Moderate Technical Design of Project or Program Substantial Substantial Substantial Institutional Capacity for Implementation and Substantial Moderate Moderate Sustainability Fiduciary Substantial Substantial Substantial Environment and Social Low Low Low Stakeholders Low Low Low Other Low Substantial Substantial Overall Substantial Moderate Moderate Results PDO Indicators by Objectives / Outcomes Improve effectiveness of tax collection IN00906756 ►Reduction of VAT gap (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 10.20 10.20 10.20 8.00 Date 21-Jan-2019 28-Feb-2020 30-Oct-2020 31-Dec-2024 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 Comments: as a result of modernization of the STA. The baseline has been calculated in January 2019 using the latest reliable national accounts statistics (for the year 2015). IN00906758 ►Increase in additional net taxes assessed per audit (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value RSD882,823 RSD882,823 RSD882,823 Increase by 10% 12/9/2020 Page 2 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 The indicator measures improvement in the effectiveness of tax collection. Increased additional net taxes assessed as a result of audit will measure improved effectiveness of audit planning process and quality of Comments: audit. The indicator will measure additional net tax assessed per audit calculated by adjusting additional tax assessed for the amount of the reduction of assessed tax due to administrative or court appeals. Lower the compliance burden for taxpayers IN00906757 ►Time required to comply with taxes - WB Doing Business Paying Taxes subindicator (Hours, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 225.50 225.50 225.50 202.90 Date 29-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 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). IN00906759 ►Percentage of taxpayers reporting that the experience of taxpayer services: i) STA website; ii) STA call center, has improved (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Website: 57; call center: 49; survey results are posted on Website: 48; call center: Website: 48; call center: Website: 48; call the STA website and Value 41 41 center: 41 an Action Plan in response to survey results is developed and implemented. Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Survey of small and medium sized companies to be carried out annually during implementation of the Comments: project to provide data on taxpayer satisfaction with the experience of taxpayer services (the STA website and call center). Intermediate Results Indicators by Components Component 2: STA Organization and Operations IN00906760 ►Separation of core and non-core tax administration activities (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Separate work Separate work Separate work streams streams for core and streams for core and Identification of core and for core and non-core tax non-core tax non-core tax non-core tax Value administration activities administration administration administration activities within STA established activities within STA activities within STA completed and operational established and established and operational operational Date 30-Sep-2018 28-Feb-2020 30-Oct-2020 31-Dec-2024 12/9/2020 Page 3 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) The indicator will measure implementation of a crucial organizational change within the STA which will be Comments: supported by the project. IN00906762 ►Increase in on-time e-filing rate for PAYE witholding tax (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 86.94 86.94 86.94 95.60 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Comments: The indicator will measure increase in on-time e-filing rate of PAYE withholding tax by employers. IN00906764 ►Decrease in tax arrears (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 61.00 61.00 61.00 40.00 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Comments: Share of tax arrears at the end of the year in tax revenues collected during the year. IN00906766 ►Decrease in uncollectable tax arrears (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 31.00 31.00 31.00 27.00 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Comments: Share of uncollectable tax arrears in total tax revenue. IN00906768 ►Improvement in taxpayer satisfaction with the appeals process in terms of impartiality and efficiency (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Not available. Not available. Taxpayer Not available. Taxpayer Taxpayer survey to be survey to be conducted survey to be conducted conducted in the first Value in the first year of the in the first year of the Improvement by 10% year of the project project implementation to project implementation to implementation to provide baseline. provide baseline. provide baseline. Date 23-Jan-2019 28-Feb-2020 30-Oct-2020 31-Dec-2024 Survey of small and medium sized companies to be carried out annually during implementation of the Comments: project to provide data on to provide data on taxpayer satisfaction with the impartiality and efficiency of the appeals process. IN00906769 ►Percentage of taxpayers reporting satisfaction with their interaction with the tax administration (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 79 (survey results are 79 (survey results are 79 (survey results are 85 (survey results are disaggregated by gender disaggregated by gender disaggregated by disaggregated by 12/9/2020 Page 4 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) and not published on the and not published on the gender and not gender and published STA website) STA website) published on the STA on the STA website) website) Date 30-Sep-2018 28-Feb-2020 30-Oct-2020 31-Dec-2024 Survey of small and medium sized companies to be carried out annually during implementation of the Comments: project to provide data on satisfaction of taxpayers (businesses) with their interaction with the STA. Component 3: ICT Tools System Modernization IN00906761 ►Increase in number of STA staff trained in National Archives processes (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 75.00 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Comments: The indicator measures number of STA staff that will be trained in National Archives processes. IN00906763 ►Increase in on-time e-filing rate for PAYE withholding tax (Percentage, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 86.94 86.94 86.94 95.60 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 Comments: The indicator measures an increase in on-time e-filing rate of PAYE withholding tax by employers. IN00906765 ►Increase in the number of offices with duly cleared paper records (Number, Custom) Baseline Actual (Previous) Actual (Current) End Target Value 0.00 0.00 0.00 18.00 Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 The indicator will measure number of offices with paper records either destroyed or transferred to the Comments: National Archives under an officially approved retention schedule. IN00906767 ►Improved case management process for enforcement and tax collections (Text, Custom) Baseline Actual (Previous) Actual (Current) End Target The new automated The new automated case The new automated case The majority of routine case management management system is management system is enforcement activities system is used to Value used to direct actions in used to direct actions in are conducted using direct actions in enforcement and enforcement and the case management enforcement and collections. collections. system. collections. Date 31-Dec-2017 28-Feb-2020 30-Oct-2020 31-Dec-2024 This indicator measures the establishment of a comprehensive case management process for Comments: enforcement and tax collections. 12/9/2020 Page 5 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) Performance-Based Conditions Data on Financial Performance Disbursements (by loan) Project Loan/Credit/TF Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P163673 IBRD-89360 Effective USD 52.00 52.00 0.00 1.57 50.38 3% Key Dates (by loan) Project Loan/Credit/TF Status Approval Date Signing Date Effectiveness Date Orig. Closing Date Rev. Closing Date P163673 IBRD-89360 Effective 24-Apr-2019 07-May-2019 03-Jul-2019 31-Oct-2024 31-Oct-2024 Cumulative Disbursements PBC Disbursement Achievement Disbursed amount in Disbursement % PBC ID PBC Type Description Coc PBC Amount Status Coc for PBC 12/9/2020 Page 6 of 7 The World Bank Implementation Status & Results Report Tax Administration Modernization Project (P163673) Restructuring History There has been no restructuring to date. Related Project(s) There are no related projects. 12/9/2020 Page 7 of 7