Solomon Islands : Domestic Resource Mobilization Project
The project supports the Government of Solomon Islands to improve tax administration. The project assists in restructuring the Inland Revenue Division (IRD) to move to a functional structure and train staff in their new roles and processes, finance the acquisition of a new tax administration information system (TAIS) and train staff in its use, and deliver a public outreach program to increase taxpayer compliance. The development outcome is improved domestic resource mobilization through more efficient tax administration that provides better services to taxpayers and increased capacity of IRD to manage the transition to a more efficient, fairer, and transparent tax framework.
Project Details
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Project Officer
Hodge, Matthew W.
Pacific Department
Request for information -
Country/Economy
Solomon Islands -
Sector
- Public sector management
Project Name | Domestic Resource Mobilization Project | ||||||||||||
Project Number | 53305-001 | ||||||||||||
Country / Economy | Solomon Islands |
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Project Status | Active | ||||||||||||
Project Type / Modality of Assistance | Grant |
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Source of Funding / Amount |
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Operational Priorities | OP2: Accelerating progress in gender equality OP6: Strengthening governance and institutional capacity |
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Sector / Subsector | Public sector management / Public expenditure and fiscal management |
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Gender | Effective gender mainstreaming | ||||||||||||
Description | The project supports the Government of Solomon Islands to improve tax administration. The project assists in restructuring the Inland Revenue Division (IRD) to move to a functional structure and train staff in their new roles and processes, finance the acquisition of a new tax administration information system (TAIS) and train staff in its use, and deliver a public outreach program to increase taxpayer compliance. The development outcome is improved domestic resource mobilization through more efficient tax administration that provides better services to taxpayers and increased capacity of IRD to manage the transition to a more efficient, fairer, and transparent tax framework. | ||||||||||||
Project Rationale and Linkage to Country/Regional Strategy | Solomon Islands is the third largest of the Asian Development Bank's (ADB) developing member countries in the Pacific, with a population of around 721,000. ADB recognizes Solomon Islands as a small island developing state and a fragile and conflict-affected situation. As a small open economy with a narrow economic base, the country is dependent on exports, which represented 42.0% of 2019 gross domestic product (GDP). Within this, logs accounted for 71.6% of exports, 22.0% of government revenues, and directly or indirectly supported nearly half of the workforce. Despite the constraints, Solomon Islands has experienced steady economic growth following the widespread civil conflict from 1998 to 2003. However, economic growth on a per capita basis has not been as large due to the fast-increasing population (more than 2% per year since 2004), and GDP per capita of $1,751, when adjusted for inflation, remains lower today than it was before the conflict. While poverty has declined in recent years, Solomon Islands has the second-lowest gross national income per capita among Pacific developing member countries ($2,020 in 2018). The United Nations classifies it as a least-developed country. Under the Solomon Islands National Development Strategy 2016-2035, the government aims to improve the social and economic livelihoods of women and men through inclusive economic growth. To achieve this goal, the government needs to mobilize more sustainable revenues from domestic sources. | ||||||||||||
Impact | Sustained and inclusive economic growth and funding for health, education, and social protection improved. |
Project Outcome | |
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Description of Outcome | Domestic resource mobilization improved. |
Progress Toward Outcome | The revenue administration and project management support consulting firm were hired on 24 March 2022, and the contract was awarded for the Supply, Installation, Commissioning, and Maintenance of the Tax Administration Information System (TAIS) on 22 July 2022. |
Implementation Progress | |
Description of Project Outputs | Tax administration restructured along functional lines, and staff trained in new roles and business processes A new fit-for-purpose TAIS acquired, and tax administration staff trained on how to obtain the greatest benefit from its use IRD capacity for gender-responsive and effective tax education and taxpayer services improved. |
Status of Implementation Progress (Outputs, Activities, and Issues) | Output 1: The Minister of Finance and Treasury has approved the new IRD structure, and the Ministry of Public Services' approval of the restructure is anticipated in Q4 2022, which will include 140 new positions. Some changes are underway. For example, a new Large Taxpayer Office has been created and staffed with 12 (existing) people. The design and development of new business processes have begun now that the advisors are in-country, and staff training will follow. Output 2: The contract to upgrade the TAIS was awarded on 22 July 2022. The firm to provide the upgraded TAIS is working with IRD and the project advisors to develop a detailed TAIS upgrade plan. It is envisaged that it will take 2 years to install the upgraded TAIS, resolve all bugs, complete user acceptance testing, and train staff in its use. Output 3: This work has not started. This work is likely to begin in the second half of 2023. A significant component of the tax outreach program will focus on increasing taxpayer understanding of how the Inland Revenue Division (IRD) will implement the Value-Added Tax (VAT). The VAT Bill is due to be considered by Cabinet in May 2023, which will impact the outreach program's design. In addition, a survey of taxpayers is being designed to give an overall understanding of how taxpayers perceive IRD's services and where improvements can be made. |
Geographical Location | Nation-wide |
Safeguard Categories | |
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Environment | C |
Involuntary Resettlement | C |
Indigenous Peoples | C |
Summary of Environmental and Social Aspects | |
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Environmental Aspects | |
Involuntary Resettlement | |
Indigenous Peoples | |
Stakeholder Communication, Participation, and Consultation | |
During Project Design | |
During Project Implementation |
Business Opportunities | |
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Consulting Services | 3. Revenue Administration and Project Management Support Consultant (firm) |
Procurement | 1. Tax Administration Information System 2. Information Technology package |
Responsible ADB Officer | Hodge, Matthew W. |
Responsible ADB Department | Pacific Department |
Responsible ADB Division | Pacific Liaison and Coordination Office in Sydney, Australia (PLCO) |
Executing Agencies |
Ministry of Finance and Treasury |
Timetable | |
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Concept Clearance | 17 Sep 2020 |
Fact Finding | 15 Feb 2021 to 19 Feb 2021 |
MRM | 23 Jul 2021 |
Approval | 27 Sep 2021 |
Last Review Mission | - |
Last PDS Update | 21 Apr 2023 |
Grant 0802-SOL
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
27 Sep 2021 | 29 Oct 2021 | 09 Dec 2021 | 30 Jun 2027 | - | - |
Financing Plan | Grant Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 10.12 | Cumulative Contract Awards | |||
ADB | 5.50 | 12 Sep 2023 | 4.87 | 0.00 | 88% |
Counterpart | 4.62 | Cumulative Disbursements | |||
Cofinancing | 0.00 | 12 Sep 2023 | 1.26 | 0.00 | 23% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | - | - | Satisfactory | - | Satisfactory |
Grant 0803-SOL
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
27 Sep 2021 | 29 Oct 2021 | 09 Dec 2021 | 30 Jun 2027 | - | - |
Financing Plan | Grant Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 6.50 | Cumulative Contract Awards | |||
ADB | 0.00 | 12 Sep 2023 | 0.00 | 6.39 | 98% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 6.50 | 12 Sep 2023 | 0.00 | 1.49 | 23% |
Grant 0804-SOL
Milestones | |||||
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Approval | Signing Date | Effectivity Date | Closing | ||
Original | Revised | Actual | |||
27 Sep 2021 | 29 Oct 2021 | 09 Dec 2021 | 30 Jun 2027 | - | - |
Financing Plan | Grant Utilization | ||||
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Total (Amount in US$ million) | Date | ADB | Others | Net Percentage | |
Project Cost | 3.50 | Cumulative Contract Awards | |||
ADB | 0.00 | 12 Sep 2023 | 0.00 | 3.26 | 85% |
Counterpart | 0.00 | Cumulative Disbursements | |||
Cofinancing | 3.50 | 12 Sep 2023 | 0.00 | 0.80 | 21% |
Status of Covenants | ||||||
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Category | Sector | Safeguards | Social | Financial | Economic | Others |
Rating | - | - | - | Satisfactory | - | Satisfactory |
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 Access to Information Policy (AIP) 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.
The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.
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 |
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Grant Agreement (External Financed - the Government of New Zealand) for Grant 0803-SOL: Domestic Resource Mobilization Project | Grant Agreement | Oct 2021 |
Grant Agreement (External Financed - the Government of Australia) for Grant 0803-SOL: Domestic Resource Mobilization Project | Grant Agreement | Oct 2021 |
Grant Agreement (Special Operations) for Grant 0802-SOL: Domestic Resource Mobilization Project | Grant Agreement | Oct 2021 |
Domestic Revenue Mobilization Project: Report and Recommendation of the President | Reports and Recommendations of the President | Sep 2021 |
Domestic Revenue Mobilization Project: Project Administration Manual | Project/Program Administration Manual | Sep 2021 |
Domestic Revenue Mobilization Project: Gender Action Plan | Gender Action Plans | Sep 2021 |
Domestic Revenue Mobilization Project: Initial Poverty and Social Analysis | Initial Poverty and Social Analysis | Sep 2020 |
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
Related Publications
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
Requests for information may also be directed to the InfoUnit.
ADB, Solomon Islands Sign $15.5 Million Grant to Boost Tax Reform
The Asian Development Bank and the Government of Solomon Islands today signed grant agreements amounting to $15.5 million to help improve the country’s tax system.ADB, New Zealand, and Australia to Help Government Reform Solomon Islands’ Tax System
The Asian Development Bank has joined with the governments of New Zealand and Australia to help Solomon Islands overhaul its tax system to expand and secure the country’s revenue base.
Tenders
Tender Title | Type | Status | Posting Date | Deadline |
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Revenue Administration and Project Management Support Consultant | Firm - Consulting | Closed |
Contracts Awarded
Contract Title | Approval Number | Contract Date | Contractor | Address | Executing Agency | Total Contract Amount (US$) | Contract Amount Financed by ADB (US$) |
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Supply Installation Commissioning and Maintenance of Tax Administration Information System (TAIS) | Grant 0802 | 22 Jul 2022 | DataTorque Limited | 5/40 Taranaki Street Wellington New Zealand | Ministry of Finance and Treasury | 1,366,350.60 | — |
Supply Installation Commissioning and Maintenance of Tax Administration Information System (TAIS) | Grant 0803 | 22 Jul 2022 | DataTorque Limited | 5/40 Taranaki Street Wellington New Zealand | Ministry of Finance and Treasury | 1,616,527.47 | — |
Revenue Administration and Project Management Support Consultant | Grant 0802 | 24 Mar 2022 | AARC Ltd | 31 Mespil Road Dublin 4 Ballsbridge Ireland | Ministry of Finance and Treasury | 3,159,497.52 | — |
Revenue Administration and Project Management Support Consultant | Grant 0803 | 24 Mar 2022 | AARC Ltd | 31 Mespil Road Dublin 4 Ballsbridge Ireland | Ministry of Finance and Treasury | 3,737,997.06 | — |
Revenue Administration and Project Management Support Consultant | Grant 0804 | 24 Mar 2022 | AARC Ltd | 31 Mespil Road Dublin 4 Ballsbridge Ireland | Ministry of Finance and Treasury | 2,002,498.43 | — |
Procurement Plan
None currently available.