CEF Annual report 2021

92 CEF ANNUAL REPORT 2021
APPENDIX 93
IMF CAPACITY DEVELOPMENT SUPPORT TO SEE COUNTRIES IN 2021
PUBLIC FINANCIAL MANAGEMENT
CD Focus Areas CD Activities Examples of Outcomes
REVENUE ADMINISTRATION
CD Focus Areas CD Activities Examples of Outcomes
Stronger PFM laws and
Institutions, including
PFM reform strategies
Budget execution
and controls are
strengthened.
Appraisal, selection
and implementation of
public investment are
improved
Cash and debt
management are
strengthened and better
integrated
Strengthened
management of fiscal
risk, particularly in
light of the Covid-19
pandemic.
HQ missions (3)
Short-term experts (10)
Regional online training
course (1)
Ongoing remote support
from two Regional Advisors
and HQ staff
Covid-19Most of these
activities were delivered
remotely using web-based
communication tools
(Webex, Zoom)
The Covid-19 situation impacted reforms and day-today
operations across all ministries of finance in the
region. Despite this, various results where achieved
as highlighted below.
• New PFM reform strategies (2021–2025) have
been developed by the state institutions, the
Federation, Republika Srpska, Brčko District and
State level in Bosnia and Herzegovina. A first draft
of the comprehensive PFM Reform Strategy has
been completed and submitted for adoption to the
entities’ leadership.
• All countries are in the process of developing new
PFM strategies and have continued to hold PFM
dialogues remotely.
• All countries in the region had completed Public
Investment Management Assessments by the
end of 2021 and have started to implement the
recommendations.
• Albania is actively working to reduce the risk and
management of arrears and other fiscal risks.
• Serbia and Albania have set up and staffed
dedicated public investment management units
and capacity is being developed to enhance
investment outcomes.
• Other countries in the region (Albania, Kosovo,
Montenegro, North Macedonia, Serbia) have
improved or are improving their legal and
regulatory frameworks for public investment
management.
• Countries are incrementally improving the
disclosure of fiscal risks in fiscal strategy
documents and budget documents.
• Fiscal Risk units have been institutionalized
in Albania and Serbia, and capacity is further
enhanced in Kosovo.
• Analytical models and data flows to the ministries
of finance or economy are improving to enable
the monitoring of fiscal risks emanating from
public corporations across the region (e.g. Albania,
Bosnia and Herzegovina, Kosovo, Montenegro, and
Serbia).
Improving
governance,
organization
structures, and
Human Resource
Management (HRM).
Developing Medium-
Term Revenue
Strategies (MTRS).
Implementing
modern Compliance
Risk Management
(CRM) methodology,
including industrybased
compliance
strategies.
Strengthening tax
auditing
Consolidating core
tax functions in fewer
offices.
Strengthening tax
debt collection.
Strengthening
compliance
efforts for large
corporations.
Improving IT systems.
HQ missions (4)
Short-term
experts (37)
Regional
workshops (2)
Substantial
ongoing remote
support from
two Regional
Advisors.
Due to the
Covid-19
situation, all
activities were
delivered
remotely using
web-based
communication
tools (e.g.,
WebEx and
Zoom).
The Covid-19 situation has continued to impact significantly on reforms and
day-to-day operations across all tax administrations in the region. Despite
this, they were able to consolidate achievements in earlier years and
progress further. These are some highlights:
• Multiyear reform programs are in place in all tax administrations, and
governance and management approaches continue to improve. Both
Kosovo and Serbia have developed new corporate strategies.
• Major IT development projects are being implemented in Albania,
Kosovo, North Macedonia, Montenegro, and Serbia to replace or
upgrade outdated IT systems. In most places, these efforts include
putting in place “fiscalization systems” (real-time electronic reporting of
invoice and cash register data to the tax administrations).
• In many places it is now obligatory for taxpayers to file their tax
declarations electronically – and tax administrations deliver most of
their services to taxpayers electronically.
• Some tax administrations have consolidated their tax debt collection
functions in fewer offices, for example Albania – three Collection
Centers and the Large Taxpayer Office (down from 14 offices); Kosovo
– one Collection Center (down from 10 offices). Kosovo has also
consolidated the VAT refund function in one office. In Albania, the VAT
refund process is conducted through e-services.
• Modern compliance risk management methodology continues to be
phased in across all tax administrations. In addition to industry projects
(e.g. tourism, restaurants, and construction) some tax administrations are
also focusing on major risk clusters related to tax types (e.g. Albania and
Serbia – personal income tax for high-wealth individuals; Kosovo – VAT).
In Bosnia and Herzegovina, the Indirect Taxation Authority’s CRM system
now also covers customs, and a Customs Compliance Strategy is in place.
• Some tax administrations continue to invest in the development of
capacity in data analytics to enable better identification of major
compliance risk clusters (Albania and Serbia). This will enable them
to allocate resources where they are most useful in terms of tax gap
reduction chances.
• The Albanian tax administration is now operating the automatic
exchange system (OECD standards) for financial account information
to/from 72 foreign jurisdictions.
• In Bosnia and Herzegovina, a Rulebook on Indirect Audit Methods and
a Law on Origin of Assets (RSTA) have been adopted; an IT system
solution is in place for collecting invoice data for CRM purposes and
to improve the VAT revenue sharing mechanism; and the MoU on data
exchange between the four tax administrations has been revised.
• The tax audit and debt collection functions are gradually improving across
most administrations. In the BiH ITA, new audit manuals and a quality
assurance system is in place. In Kosovo, an Audit Improvement Strategy is
in place and several audit techniques guides have been developed.
• The use of key performance indicators as a management tool to
achieve higher organizational performance in key areas has begun
to take root in some administrations (e.g. Albania, Kosovo, North
Macedonia, and Montenegro).