The proposed TA aims at strengthening the revenue collection capacity of MIRA. More specifically, MIRA is expected to increase revenue collection through: (i) the introduction of ICT initiatives to increase voluntary tax compliance; (ii) strengthening its tax audit system to enforce tax compliance; and (iii) the effective implementation of current tax legislation and policy as well as the pursue and implementation of further tax policy reforms.
|Project Name||Enhancing Tax Administration Capacity|
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Governance and capacity development
|Sector / Subsector||
Public sector management - Public administration
|Gender Equity and Mainstreaming|
|Description||The proposed TA aims at strengthening the revenue collection capacity of MIRA. More specifically, MIRA is expected to increase revenue collection through: (i) the introduction of ICT initiatives to increase voluntary tax compliance; (ii) strengthening its tax audit system to enforce tax compliance; and (iii) the effective implementation of current tax legislation and policy as well as the pursue and implementation of further tax policy reforms.|
|Project Rationale and Linkage to Country/Regional Strategy||The Maldives' fiscal situation is under severe stress and an effective fiscal consolidation program remains paramount to the government's goal of enhancing service delivery including outreach while strengthening macroeconomic and financial stability. The fiscal deficit as a percentage of gross domestic product (GDP) was 12.6% in 2012, one of the highest among the developing member countries of the ADB. The widening fiscal deficit is caused by two principal factors: (i) increased government expenditures including added pressure to deliver public services, especially in view of the challenges posed by the country's archipelagic nature and its exposure to climate change risks; and (ii) the limited revenue collection capacity of the country's nascent tax administration. On the expenditure side, a proposed World Bank TA will address the rationalization of government expenditure. On the revenue side, this TA will build on ADB's earlier support toward establishing the MIRA. As recently as 2008, with ADB's Economic Recovery Program (ERP), the government introduced comprehensive tax reforms leading to the roll-out of a modern taxation system. Despite important achievements, the full roll-out is not complete and further work is required to diversify tax policy and further strengthen tax administration capacity. In line with the proposed assistance, the International Monetary Fund has acknowledged that addressing the fiscal deficit is the most pressing macroeconomic priority, and emphasized the need to implement tax policy reforms and strengthen tax administration capacity.|
|Impact||Improved fiscal position|
|Description of Outcome||Enhanced capacity of MIRA in tax administration|
|Progress Toward Outcome|
|Description of Project Outputs||
1. Taxpayer services capacity of MIRA enhanced
2. Audit capacity of the MIRA strengthened
3. Readiness of the MIRA to effectively implement tax policy reforms strengthened
|Status of Implementation Progress (Outputs, Activities, and Issues)||
All individual consultants have completed assigned tasks and activities. They have advised MIRA on tax policy implementation, audit and ICT developments.
The SAP CRMS consulting firm who is helping in the standardization and improvement of processes at MIRA through enhancement of information flow, taxpayer management, and controls is scheduled to complete all activities by end August 2017. Said firm has also provided training to MIRA staff who will maintain and undertake future enhancements to the system.
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design||The proposed technical assistance (TA) is highly relevant to further expand tax revenue administration capacity against the backdrop of a weak fiscal situation in the Maldives. A consultation mission to assess the feasibility of supporting the Maldives Inland Revenue Authority (MIRA) was fielded in December 2012. A fact-finding mission was fielded on 18 21 February 2013. On 28 February 2013 the Government of the Maldives formally requested the Asian Development Bank (ADB) to provide a TA. The Office of the Vice-President cleared the TA on 9 May 2013 as it was not part of the country operations business plan. The government concurred with the impact, outcome, outputs, implementation arrangements, cost financing arrangements, and terms of reference.|
|During Project Implementation||Supported by the consultant team, the MIRA will organize conferences with stakeholders, including officials from the Japanese National Tax Agency, to share and disseminate findings. The outputs of the TA will be widely disseminated online as well as through publications.|
|Consulting Services||A consulting firm (international, 20 person-months) will be recruited to develop the CRMS. Procurement method will be QCBS (quality:cost ratio of 90:10 since the services required are highly specialized) and selection will be evaluated on the basis of simplified technical proposals. In addition, one tax administration (tax audit) specialist (5 person-months) and a tax policy specialist (2 person-months) will be recruited as individuals. The two individual consultants have a very specialized type of skill set (preferably former tax authority officials with hands-on experience) and cannot be recruitment through the consulting firm. Two IT specialists will also support the functional requirement study and the existing SAP-based computer system. An IT consultant will also be recruited to provide remote advisory support to MIRA to help resolve critical issues and offer guidance on system upgrades. All consultants will be recruited according to the Asian Development Bank (ADB) Guidelines on the Use of Consultants (April 2010, as amended from time to time). The cost estimate for consultants is $578,200.|
|Procurement||The necessary hardware and licenses (software) will be provided by the implementing agency, Maldives Inland Revenue Authority|
|Responsible ADB Officer||Hidalgo, Ma. Kristina|
|Responsible ADB Department||South Asia Department|
|Responsible ADB Division||Public Management, Financial Sector and Trade Division, SARD|
Ministry of Finance and Treasury
Republic of the Maldives
|Concept Clearance||08 May 2013|
|Fact Finding||18 Feb 2013 to 21 Feb 2013|
|Approval||04 Dec 2013|
|Last Review Mission||-|
|Last PDS Update||08 Sep 2017|
|Approval||Signing Date||Effectivity Date||Closing|
|04 Dec 2013||03 Mar 2014||03 Mar 2014||31 Dec 2015||31 Jul 2017||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|0.00||850,000.00||150,000.00||0.00||0.00||0.00||1,000,000.00||04 Dec 2013||700,287.75|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.
|Title||Document Type||Document Date|
|TA 8525-Maldives - Enhancing Tax Administration Capacity: Final Report on Capacity Building of Maldives Inland Revenue Authority (MIRA)||Consultants' Reports||Jul 2015|
|Enhancing Tax Administration Capacity||Technical Assistance Reports||Dec 2013|
Safeguard Documents See also: Safeguards
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Evaluation Documents See also: Independent Evaluation
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