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Country: Lao PDR.

Description of the Assignment:

Background

The Government of Lao PDR (GoL), in collaboration with the United Nations Development Programme (UNDP) Lao PDR, initiated the National Planning and Financing for Inclusive Development (NPFID) Project in May 2023 to enhance the efficiency and internal capacity of various aspects within the national planning and financing policy cycles. This multi-ministerial project involves six key technical entities responsible for its execution: 1) Fiscal Policy Department (FPD), Ministry of Finance (MOF); 2) Department of International Organization (DIO), Ministry of Foreign Affairs (MOFA); 3) Development Research Institute (DRI), Ministry of Planning and Investment (MPI); 4) Lao Statistics Bureau (LSB), Ministry of Planning and Investment (MPI); 5) Department of Planning (DOP), Ministry of Planning and Investment (MPI); 6) Department of International Cooperation (DIC), Ministry of Planning and Investment (MPI). Together, these entities collaborate to drive the objectives of the NPFID Project and facilitate inclusive development in Lao PDR through improved planning and financing mechanisms.

The project is supporting the development of tax exemption tracking database under the Ministry of Finance (MOF). This initiative seeks to bolster tax revenue collection and investment promotion strategies by enhancing the Ministry of Finance’s (MOF) capacity to systematically monitor tax expenditures arising from fiscal investment incentives. More specifically, it is expected that the development and operation of this database will: 1) Enhance understanding of tax expenditures related to concession projects and other foregone revenues stemming from non-tax incentives within the current investment promotion framework; 2) Improve tax revenue collection by addressing missed collections resulting from expired or expiring tax exemptions and tax treatments; 3) Advocate for policy reforms that unlock revenue potential by making the investment promotion framework more supportive of inclusive growth.

The Ministry of Finance, under the same project, has finished the testing of the illustrative model of the database in early 2024. MOF’s Fiscal Policy Department (FPD), with support from UNDP is seeking the services of a National Consultant to provide research, data collection, data entry and coordination support on delivering a tax expenditure reporting framework and database.

Objective

Under the guidance of the Department of Fiscal Policy at the Ministry of Finance and the Team Leader of the Inclusive Growth Unit at UNDP Lao PDR, the consultant will facilitate the development of a tax exemption tracking database based on the illustrative model. The consultant must ensure that the database aligns with and is linked to other existing databases, including the TaxRIS database at the Ministry of Finance, concessional project databases at the Ministry of Planning and Investment, and other relevant databases in line ministries. Additionally, the consultant must collaborate with an IT consulting firm that will be onboarded to ensure that the database is updatable and capable of storing data and information that are useful for the Ministry of Finance. This data will be used to produce policy documents, including tax expenditure reports, that can inform the development of effective investment promotion regimes.

Scope of Work

Under the overall guidance of the Fiscal Policy Department (FPD), the Ministry of Finance (MOF), in close coordination with the Project Management Unit of NPFID Project and UNDP Project Assurance team (Inclusive Growth Unit of UNDP), the consultant will be responsible for the following tasks:

1. Provide technical input, facilitation, interpretation, and coordination support to the Ministry of Finance and the IT consulting firm to successfully transform the tax exemption illustrative model into a functional database.

2. Closely work with the IT consulting firm to ensure that the database has a functional user interface that allows data input and updates.

3. Closely work with the IT consulting firm to ensure that the database can store and generate useful data tables to identify revenue foregone from each type of tax exemption and preferential tax treatment.

4. Work with the IT consulting firm to ensure that it is linked with other databases and develop a user manual for the Ministry of Finance and relevant government entities.

Provide technical support and training to technical officers at the Ministry of Finance and relevant ministries to update the database, either manually or through data extrapolation from other databases. Additionally, provide technical training to these officers to enable them to conduct fundamental analysis to identify revenue foregone

Period of assignment/services: 120 working days over 6 months.

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