CO PUBLIC FINANC. MANAGEMENT PROJECT II

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The Second Public Financial Management Project for Colombia has two developmental aims. It strengthens the capacity of the Direccion de Impuestos y Aduanas Nacionales (Directorate of National Taxes and Customs)(DIAN) to foster voluntary compliance; collects revenues efficiently, effectively, and equitably; and combats tax evasion and smuggling, for the DIAN to mobilize adequate tax revenues to finance public expenditures. It also aims to strengthen public expenditure management at the central government level, to facilitate achievement of fiscal and national development objectives, improve cost effectiveness of public services, and increase transparency and accountability. The project has two main components: revenue administration and public expenditure. The first component comprises six sub-components which strengthen organization and management of the DIAN; facilitate voluntary compliance; improve the effectiveness of the DIAN in managing routine processing of tax declarations and payments, and cargo, customs declarations, and payments; strengthen the capacity of the DIAN in enforcement operations; and improve policy and the legal framework of revenue administration. The second component comprises three sub-components that improve macro-programming and formulation and monitoring of the budget; strengthen budget execution, treasury, and public credit and accounting; improve the evaluation of results of public expenditure; and strengthen public procurement and contracting.