Institutional Strengthening

                                   BOLIVIA


SECTOR:                 Institutional Strengthening

PROJECT TITLE:          Support for Tax Administration and Policy Management
                        (ATN/SF-4553-BO; 924/SF-BO)

TOTAL COST:             $4.98 million

FINANCING:
      IDB               $4.5 million
    LOCAL               $480,000

APPROVAL DATE:          June 8, 1994

GENERAL DESCRIPTION:    The objective of this technical cooperation is to
                        help the government of Bolivia upgrade its tax-
                        administration management system and update tax
                        policy in order to develop a high-level management
                        structure capable of planning, carry out and oversee
                        management functions to make the country's tax
                        collection systems more efficient and more effective.

                        The specific objectives of the technical cooperation
                        are to: (a) set up a management control system using 
                        information systems, operating plans and management
                        audits; (b) complete and ensure optimal use of the
                        systems developed for the different tax
                        administration areas; (c) decentralize operations and
                        enhance the efficiency of the regional tax offices in
                        areas with the highest levels of tax evasion; 
                        (d) revise the legal framework and devise new tools
                        to reflect the updated tax policy as formulated in
                        the government's plan; (e) develop and institute a
                        fully operational human-resources policy;  (f) set up
                        a permanent national training plan; and (g) meet
                        collection targets, broaden the tax base, and reduce
                        evasion.

                        The activities to be carried out during program
                        execution will include:  (a) strengthening of the
                        management system in place at the Internal Revenue
                        Bureau, area offices and regional directorates;  (b)
                        evaluation of existing systems and development of new
                        systems for collection, auditing and technical
                        judicial and legal matters;  (c) reviewing the legal
                        framework of Law 843; and (d) analyzing tax policy
                        and its impact on tax-administration systems.

                        EXCEPTIONS TO BANK POLICY

                        The executing agency will receive support from the
                        Office of Project Services of the United Nations
                        Development Program (OPS/UNDP) as the specialized
                        agency in charge of the institutional strengthening
                        and tax policy components  and the Inter-American
                        Center of Tax Administrators (CIAT) for execution of
                        the training program.

CONSULTANTS:            UNDP will hire the following consulting services: 
                        (a) international consultants, for a total of 235
                        staff-months, for strengthening the management
                        system, evaluating system development and
                        utilization, assisting with changes in the legal
                        framework and for the area of tax policy; (b) local
                        consultants, for a total of 418 staff-months, for
                        strengthening the management system,  evaluating
                        system development and utilization, developing new
                        systems, changing the legal framework and assisting
                        with changes in tax policy.

GOODS AND EQUIPMENT:    Computer equipment for a total value of US$200,000
                        will be purchased.

CIVIL WORKS:            Not applicable.

EXECUTING AGENCY:       National Finance and Administration Secretariat

ADDRESS:                Internal Revenue Bureau

                        Calle Ballivian 1333
                        La Paz, Bolivia
                        Telephone:      (591-2) 37-6258  
                        Fax:            (591-2) 37-6375
                        Contact person: Mrs. María Luisa Urday
                                        Director General