Revenue Administration Reform Project

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The development objective of Revenue Administration Reform Project is to improve the effectiveness of operational functions of Montenegro’s Tax Administration (MTA) and to reduce the compliance costs for corporate taxpayers. This project has three components. 1) The first component, Institutional Development, aims to help enhance the strategic focus of management, increase attention to integrity, strengthen staff management and training, develop the analytical capacity required to support strategic management within MTA, improve the legal framework and the appeals function, and institute a modern revenue administration. Subcomponent one will focus on institutional and organizational development, enhancing strategic focus and planning capacity; strengthening executive, managerial, technical and operational capacity; and includes the introduction of an enhanced monitoring system to assist in the management of the MTA’s performance. Subcomponent two will focus on strengthening the capacity for managing the change process. Subcomponent three will strengthen the MTA’s capacity to coordinate project implementation and contract management. 2) The second component, Business Processes, supports modernization of MTA’s business processes and improvements in operational effectiveness. This component has three sub-components. Subcomponent one will: introduce international best practices into the operational functions of the MTA; strengthen registration and return processing; formalize risk analysis in audit selection and enforcement activities, improve business analytics to identify where limited MTA resources should be deployed to return the best results or meet specific MTA objectives; and strengthen anti-fraud and criminal investigation capacity of the MTA. Subcomponent two will cleanse and rationalize data from the existing system in the first years of the project and enhance the IT infrastructure, including the enterprise architecture, data center, security, and disaster recovery plans. Subcomponent three will develop the specifications for the new IRMS system; procure, localize and implement a commercial Integrated Revenue Management System to replace the current system; and procure the necessary equipment required to implement the IRMS system. 3) The third component, Taxpayer Services, aims to finance activities to modernize taxpayer services and increase understanding of revenue laws, procedures, rights and obligations of taxpayers, and thereby reduce the compliance burden to taxpayers, and strengthen external and internal communications.