Term of Reference for International VAT Expert for Revenue

Background

1. Afghanistan is a mountainous country with the rate of people living below the poverty line up to 55% and unemployment at 47%. The Government of Afghanistan (GoA) is committed to re-invigorate the country’s economy, empower Afghans and Afghan institutions for better service delivery, create jobs, and promote peace-building and sustainable development.

2. The Afghanistan Revenue Department (ARD) depends from the Ministry of Finance (MoF) with a total of 752MoF HQ employees. ARD administers and collects the tax and non-tax revenue for the GoA in accordance with the Income Tax Law, 2009 and the Tax Administration law 2015. ARD’s responsibilities are divided across 3 Deputy Directorates of Revenue and  10 Directorates geographically dispersed in Kabul.The broader economic and political environment affecting revenue administration and collection includes the substantial gap between sustainable domestic revenue growth and total GoA expenditures. Closing the gap will require a combination of policy and administration measures to enhance the tax base while the economic growth is boosted. However, this will demand time and a more peaceful environment.

3. In recent years, ARD has made important progress in increasing taxpayers’ compliance and tax revenue collectionwith the support of the donor community.  These efforts include a wide range of reforms and restructuring within the ARD, particularly the segmentation of the taxpayers into Large, Medium and Small groups and the rollout out of these offices to some selected provinces. However, a few gaps and deficiencies still exist in both the organisational structure and in the operations of the ARD as an institution.

4. ARD hasundertaken a reform process and plan to prepare for Value-Added Tax (VAT) implementation.The introduction and implementation of Value Added Tax (VAT) in 2022 is a key component of the Government Islamic Republic of Afghanistan’s mid-term approach to domestic revenue mobilization and is linked to benchmarks in agreements with several donors. The VAT Strategic Implementation Plan specifies significant preparatory work to be completed by December 2021.

5. Generally, VAT will be charged on all imports and on the supply of taxable goods and services in Afghanistan made by VAT registered taxpayers.  Due to a high VAT registration threshold, the number of taxpayers who will be initially required to register for VAT is expected to be approximately 900 of the largest businesses in Afghanistan.  The main counterpart for VAT implementation and administration will therefore be the single Large Taxpayer Office (SLTO). The ARD is responsible for administering the VAT. The Afghanistan Customs Department (ACD) will also have a significant role in terms of collecting VAT on imports, information sharing and verification of exports.

6. The World Bank is assisting the Afghanistan Revenue Department (ARD) and the Large Taxpayers Office (LTO) in preparation for Implementation of VAT.As part of the Afghanistan Reconstruction Trust Fund (ARTF) – Fiscal Performance Improvement Support Project, the World Bank has provided funding to support the Government of Afghanistan in meeting its goals and implementation of this project.

Objective

The International VAT Expert will provide technical support to the VAT Sub-Directorate and the SLTO in drafting VAT technical documents (VAT audit and refund) as well as providing advisory services on better preparation for VAT implementation. The aim of this assignment is to support prepare and strengthen the ARD so that it is institutionally ready to administer the new VAT.  The VAT is due to be implemented in December 2021.

7.

Documents of Reference

8. The International VAT Expert will be framed by the following tax laws including tax administration law, value added tax law and the vat regulation.

9. The international expert will draft and review VAT technical documents all in conformity with the available Tax & Customs laws and regulations, Public Finance Management Law, and the VAT Procedures.

Tasks and Activities

10. The International VAT Expert will carry out the following tasks and activities but not necessarily restricted to:

1. 1. 1. Draft VAT audit documents (in English language).

1. 1. 1. Draft VAT audit and refund procedures.
      2. Draft VAT audit manual including the description of the Case Management System (CMS) that will support and M&E the audit work outcomes.

c. Draft guide for VAT audit methods and techniques.

d. Draft guide for intelligence and investigation.

b) Draft VAT risk management documents (in English language).

a. Draft the compliance gaps’ sector analysis.

b. Draft risk management strategy.

c. Draft risk analysis and research main tools.

c) Provide technical advice on VAT implementation arrangements including the estimated workload by auditor and the corresponding HR profile. The workload estimations should be according to the location of the audit team and the features and nature of the business located around the ARD locations.

d) The advisor will be working with the SIGTAS on VAT incorporation of the VAT audit and refund process in SIGTAS.

Deliverables

11. ARD need a confident person, who has excellent VAT technical skills, to contribute ARD in VAT implementation, help local staff and deliver work of the highest quality. Moreover, the International VAT Expert will draft monthly reports providing the progress of deliverables and drafting of the VAT documents.

1. 1. Deliverable I:
      1. Draft VAT audit and refund procedures.
      2. Draft VAT audit manual.

c. Draft guide for VAT audit methods and techniques.

d. Draft guide for intelligence and investigation.

1. 2. Deliverable II:

a. Draft compliance gaps and risk management strategy.

b. Draft risk analysis and research main tools.

Payment Schedule

Extended and Coordination

The International VAT Expert will require 180 days on field mission (6 working days a week).

12. The International VAT Expert will coordinate with Mr. Ahmad Yama Noorzai, VAT Project Director yama.noorzai@mof.gov.af+93 (0) 794954574. The ARD will provide a space and a desktop computer connected to a printer. The International VAT Expert can use meetings rooms at required base, previously booked.

Qualifications

13. The expert academic and experience qualifications are:

At least Master’s Degree in law and/or economics, taxation, public finance, public administration or other relevant field;

a) At least 15 years of experience in the area of taxation, including in post-conflict countries; eight years of which must have been in a senior management position in the public or private sector, past advisory services in a revenue administration field are considered an advantage; 

b) Proven experience in tax documents drafting. Audit and refund drafting in revenue matters is considered an advantage;

c) Research and produce of analytics in revenue matters is considered an advantage;

d) Excellent communication skills – ability to communicate efficiently and effectively in English;

e) Ability to manage teams and work in multicultural environment;

f) Excellent report writing and presentation skills; and

g) Ability to work under pressure and meet tight deadlines.

14. Location: Based in Kabul, Afghanistan.

15. Note: Eligibility requirements in compliance with paragraphs 3.21, 3.22, & 3.23 of theWorld Bank’s Procurement Regulations for IPF Borrowers, Procurement In investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016, revised November 2017.

16. The attention of interested Consultants is drawn to paragraph 3.16 and 3.17 of the World Bank’s Procurement Regulations for IPF Borrowers, Procurement In investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016, revised November 2017, setting forth the World Bank’s policy on conflict of interest.  In addition, please refer to the following information on conflict of interest related to this assignment as per paragraph 3.16 and 3.17 of World Bank’s Procurement Regulations for IPF Borrowers available at www.worldbank.org/.

17. Individual Consultants will be selected through IC in accordance with the procedures set out in the World Bank’s Procurement Regulations for IPF Borrowers, Procurement in investment Projects Financing, Goods, Works, Non-Consulting and Consulting Services July 2016, revised November 2017.

18. Expressions of interest must be delivered in a written form to the address below (in person, by mail, or by e-mail) by DATE, 31 July, 2021 by 12:00 Hours.

19. Please submit your CVs to the blow email address:

20. Jawad.ahmadzai@yahoo.com and copy to yama.noorzai@mof.gov.af and eimaljahangir@mof.gov.af