А. BACKGROUND

Mongolia received a credit from the International Development Association (IDA) for the Strengthening Fiscal and Financial Stability Project (SFFSP). The objective of the SFFS Project has been to contribute to the Government of Mongolia’s efforts to strengthen fiscal and financial stability and improve the quality of expenditure. The project is designed into five components: (A) Strengthening Macroeconomic and Fiscal Management; (B) Improving the Efficiency of Public Financial Management; (C) Enhancing Financial Sector Stability; (D) Strengthening the Social Protection System; (E) Project Management and Monitoring. For more details, please refer to the Project Appraisal Document Report No. PAD22691.  

Sub-Component A.2, managed by the MOF, aims at “Strengthening fiscal policy and planning” by improving the existing legal framework through reviewing the related fiscal laws and including new fiscal relations to address the inconsistencies in tax laws, introduce international best practices in the tax laws such as transfer pricing and base erosion and profit shifting (BEPS), and build comprehensive revenue forecasting and financial models for economic analysis of large-scale mega projects. 

The Government of Mongolia has undertaken a number of important measures of tax reform since 2019 to promote investment climate, create more jobs, support small and medium-sized enterprises, protect, and balance the taxpayer rights and responsibilities and reduce significantly the compliance costs. Furthermore, under the tax reform, the tax authority’s power to collect tax debts has been enhanced. The tax reform package effective since January 1, 2020 was approved by the Parliament on March 22, 2019. 

However, with the spread of Covid-19 pandemic, business insolvency has worsened dramatically leading to a significant increase in the accumulated tax arrears. Although, the tax authority now exercises more collection power over tax arears and the related law and regulations are in place, there has not been a significant exercise of such power due to adoption of a lenient approach in the difficult times of the pandemic. Yet, with the slow economic recovery from the pandemic, the tax authority will have to take noticeable actions towards reduction of tax debts.

Moreover, tax revenues have become more volatile due to the emerging economic uncertainties. As a result, the Revenue Department of the General Department of Taxation has been facing with difficulties to distribute and allocate tax revenue collection plans among the local tax authorities.

B. OBJECTIVE OF THE ASSIGNMENT

The objectives of the assignment is to provide support in (i) improvement of the current regulations and manuals for tax collection, tax revenue performance monitoring and administration of tax arrears; and (ii) expansion of the Integrated Tax Administration System to address the challenges faced by the GDT in relation to the administration of tax arrears and allocation of tax revenue plans among the local tax authorities.

С. SCOPE OF WORK

Key responsibilities will include the following, but not limited to:

Task 1. Revision of the current regulations and manuals for tax collection, tax revenue performance monitoring and administration of tax arrears:

1. Monitor the tax revenue performance against the monthly plans with a view to improving the related regulations and manuals in line with international best practices; and
2. Revise and improve the current regulations and internal manuals on debt collection, seizure, confiscation and storage of assets, valuation of seized assets, and auction in light of the tax reform package law most recently approved by the Parliament.

Task 2. Expansion of the Tax Administration Information System (TAIS) to address the challenges faced by the GDT in relation to the administration of tax arrears and allocation of tax revenue plans among the local tax authorities. The Consultant will undertake the following activities in close collaboration with the respective specialists of the Revenue Department of the GDT and the IT specialists of the TAIS: 

1. Review the current legal and regulatory environment for the administration of tax arrears and allocation of tax revenue plans among the local tax authorities;
2. Based on the above review and the revised regulations and manuals completed under Task 1, define business processes and requirements for the modules on (i) the administration of tax arrears; and (ii) the allocation of tax revenue plans among the local tax authorities and present the draft business processes and requirements to the respective officials of the GDT and the TAIS developers for their review and feedback; 
3. Based on the review, finalize the business processes and requirements documentation for the above modules of the TAIS and obtain the necessary approvals from the authorities of the GDT. The agreed and approved business processes and requirements of the modules shall then serve as inputs for the TAIS developers; 
4. Provide technical support to the developers of the TAIS when required regarding the additional modules referenced above; and
5. Provide training to the staff of the GDT on particular issues when requested by the Client and to build the capacity of the GDT to undertake management of tax arrears in future utilising the TAIS tools. 

Task 3. Improvement of revenue forecasting:  

1. Undertake state and local budget revenue performance analyses with the focus on factors impacting budget revenue performance and, based on the findings of the analyses, propose possible measures to improve revenue performance management; 
2. Revise existing revenue forecasting models and improve the models based on the international best practices;
3. Provide functional support to daily operations of the Revenue Department of the GDT regarding the implementation of the revenue forecasting models;
4. Develop manuals and procedures and deliver training to ensure sustainability of the enhanced forecasting; and
5. Undertake any other tasks related to the activities above as reasonably requested by the Client.   

D. DELIVERABLES

1. Final drafts of the revised/improved regulations and internal manuals on tax collection, tax revenue performance monitoring for approval by the GDT;
2. Final drafts of the revised/improved regulations and internal manuals on debt collection, seizure, confiscation and storage of assets, valuation of seized assets, and auction for the approval by the GDT; 
3. Documentation of the business processes and requirements of the TAIS modules on (i) administration of tax arrears; and (ii) allocation of tax revenue plans among the local tax authorities approved by the GDT and delivered to the TAIS developers;
4. Report on the findings of the state and local budget revenue performance analyses incorporating the proposal on possible measures to improve the revenue performance management; and
5. Improved revenue forecasting models, manuals and training of end-users.

E. CONSULTANT’S QUALIFICATION/ SELECTION CRITERIA

Education: A suitable candidate should have a bachelor’s degree in a relevant field: finance, economics, taxation, accounting or business administration;

Experience: Candidate should have at least two years of professional experience in tax, finance or economics research and analysis;

Language skills: Fluent written and spoken skills in English; 

Computer literacy: Be proficient in MS Office such as Word, Excel and PowerPoint, and have preferably skills for excellent web research and navigation skills; 

Other: Excellent analytical, organizational, communication and interpersonal skills with the ability to function effectively and collaboratively in a team environment; high integrity and accountability; and

Be able to work overtime if required.

F. SUPERVISION AND REPORTING

The Consultant will report directly to the Director General of the Tax Policy Department, MOF and Director-General of the Revenue Department of the GDT and will work on a day-to-day basis with officers, international and local consultants of the GDT and MOF on all matters related to the assignment. The Director-General of the Revenue Department of the GDT will meet regularly with the Consultant to review progress with the work program and to resolve any outstanding issues. 

The Consultant will be required to carry out his/her tasks in line with the approved CIP which will serve as a basis for measuring progress on desired outcomes and goals for the entire consultancy service. 

All information provided to the consultant will be regarded as confidential and information will not be shared with any outside individuals or organizations.

G. INSTITUTIONAL ARRANGEMENTS

The General Department of Taxation (the Revenue Department) will provide office space and will work with the consultant on a day-to-day basis. The consultant shall be provided with all necessary data and information to perform the tasks detailed in Section C. 

H. CONTRACT DURATION

The assignment is expected to commence in September 2022. The total duration of the consultancy service rendered is estimated to be 10 months. 

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