2014年-世界发展银行全球_Peoples_Republic_of_Bangladesh_-_Revenue_Mobilization_Program_for_Results___VAT_Improvement_Program_61页_657kb

Summary of the Revenue Mobilization Program for Results (PforR) and VAT Improvement Program (VIP) in Bangladesh

Core Content

The VAT Improvement Program (VIP) is a Program for Results (PforR) supported by the World Bank and funded by IDA (International Development Association) with a total of US$60 million over the period FY2014-19. The program is managed by the VAT Wing of the National Board of Revenue (NBR), which accounts for 95% of the financing, while the ERD (Economic Research Division), as the coordinating agency, is responsible for the remaining 5%. The program is designed to improve the VAT system in Bangladesh, with a focus on financial management, procurement, and governance.

Fiduciary Risk Assessment

1. The Integrated Fiduciary Systems Assessment (IFSA) concluded that the overall fiduciary framework is high risk, primarily due to the lack of internal audit systems, weak asset management, and limited capacity in procurement and financial reporting.
2. Despite these risks, the framework is considered adequate for program implementation, provided that risk mitigation measures are in place.
3. The Bank retains the final decision-making authority on disbursement, based on the achievement of DLIs (Development Loan Instruments), which are performance-based indicators.

Budgeting and Planning

• The program is funded through the government's annual development budget and is accounted for separately as IDA-financed.
• The total program expenditure is estimated at US$73 million over FY2014-19.
• There is no integrated budgeting process in Bangladesh, but medium-term fiscal and budget frameworks are in place for the revenue budget.
• The development budget lacks a formal medium-term framework, but projects are typically approved for multiple years.
• The VAT Wing of NBR has limited experience in budgeting and planning for development programs, requiring technical assistance from the Bank, IFC, and IMF.

Budget Execution

• Fund releases are generally timely in the first two quarters of the fiscal year, but delays can occur if accounts statements and utilization reports are not submitted on time.
• A Project Director in the Program Implementation Unit (PIU) of NBR will be responsible for timely reporting and coordinating with the Chief Accounts Officer (CAO) and Accountant to ensure accurate financial data.
• An additional staff member will be recruited in the Comptroller General of Accounts to ensure timely fund utilization reports and compliance with disbursement timelines.

Internal Controls and Audit

• Internal audit in Bangladesh is underdeveloped, with no dedicated internal audit cadre.
• Internal audit cells exist in line ministries but lack modern techniques and effective follow-up mechanisms.
• A strategy for internal audit is in development under the public financial management reform, and it is expected to be approved by the government.
• The Comptroller and Auditor General (OCAG) will be the independent auditor for the program, in line with Bank requirements.
• A tender evaluation committee will be formed for high-value procurements, including two international experts and one local expert.
• An audit committee will be established in the IRD (Internal Resources Division) of NBR within 4 months of program effectiveness to ensure follow-up on audit findings.

Procurement

• A sound legal and regulatory framework exists for public procurement, governed by the Public Procurement Act (2006) and Rules (2008).
• The Central Procurement Technical Unit (CPTU) provides standard bidding documents for goods, works, and services.
• For ICT procurements, custom bidding documents will be used, aligned with international best practices.
• The program includes a COTS (Commercial Off-The-Shelf) software procurement, which requires rigorous evaluation processes.
• E-Procurement will be implemented, with PROMIS (National Procurement Monitoring System) used to track procurement performance.
• A complaint handling system will be established to manage procurement disputes.

Key Mitigation Measures

• DLI 1.1.1 and DLI 1.1 require transparent procurement processes with independent evaluation committees.
• DLI 6 includes the following:
  • Use of national e-GP system for at least 25% in Year 1, 50% in Year 2, and 75% in subsequent years.
  • Quarterly fund utilization reports to be submitted to the Finance Division.
  • Resolution of significant audit findings within 6 months of the audit report.
• A fixed asset tracking system will be introduced to manage ICT equipment and other capital assets, with staff training included in the capacity-building plan.

Governance and Anti-Corruption

• Corruption perception in Bangladesh remains high, as per Transparency International's CPI 2013 (ranked 136th out of 177 countries).
• The Anti-Corruption Commission (ACC) is institutionally challenged, despite having formal independence and financial autonomy.
• The program will benefit from ACC's oversight, as the ERD will monitor and report on fraud and corruption complaints.
• The program is designed to improve transparency and compliance, especially in procurement and financial reporting.

Conclusion

The VAT Improvement Program (VIP) presents high fiduciary risks, but the government and implementing agencies have committed to a set of mitigation measures to ensure program integrity and accountability. These include strengthening internal audit systems, improving procurement processes, and enhancing asset management. The Bank will monitor the implementation of these actions to ensure program success and achievement of DLI milestones.