SCOPE OF WORK

USAID LIBERIA local empowerment for accountability and decentralization (lead) activity

GOL TAX EXPENDITURE, VAT POLICY ANALYSIS, AND FISCAL DECENTRALIZATION

STATEMENT OF WORK

• Background

The USAID Liberia Local Empowerment for Accountability and Decentralization (LEAD) Activity was awarded to DAI Global LLC for a period of five years, from May 19, 2023 to May 18, 2028. LEAD Activity is being implemented in close collaboration with the Government of Liberia (GOL) to support the implementation of priority policy reforms including in domestic revenue mobilization (DRM) and decentralization, increasing financial transparency and accountability both in terms of revenue management and expenditures. The primary counterparts for LEAD Activity are ministries, agencies and commissions as well as the partner counties and cities. The LEAD Activity will also work with active civil society and professional media institutions to provide effective oversight of government financial management and ensures proper use of revenues, which is critical to the success of proposed interventions.

1. Scope

This assignment includes the following three components:

• Prepare a report on the Government of Liberia Tax Expenditure.

• Carry-out VAT policy analysis with a micro-simulation model.

• Develop, improve or support fiscal decentralization policies, regulations, and procedures.

• Objectives of the Assignment

The first objective of this assignment is to prepare a report on the Government of Liberia Tax Expenditure. To this end, the study will conduct a mapping, evaluation and analysis of various tax concessions (incentives, exemptions, holidays, deductions, credits, rebates etc.), quantify tax expenditure and strengthen capacity, through various training modalities (group sessions, mentoring, coaching) of relevant units/departments of the Liberia Revenue Authority (LRA) and Revenue and Tax Policy Division (RTPD) of the Ministry of Finance and Development Planning (MFDP) that are responsible for the tax expenditure estimation and reporting.

The scope of the assignment includes a comprehensive mapping of the various sources of tax expenditure, establishment of the benchmarked tax system with respect to the major tax types (i.e., customs duties, goods and services tax, excise tax, corporate income tax, and real property tax), identification of deviations from the benchmarked tax system and quantification of the tax expenditure by tax type, concession-wise and beneficiaries.

The second objective of this assignment is to conduct a VAT policy analysis with a micro-simulation model. It will assess the revenue generating potential of the forthcoming value added tax (VAT) vis-à-vis of the current goods and services tax (GST) and train counterparts on how to use micro-simulation model. This exercise will help LEAD and GOL staff to prepare policy brief for senior leadership and legislature.

The third objective of this assignment is to develop, improve or support fiscal decentralization policies, regulations, and procedures. The assignment will identify the lead institutions that are involved in the fiscal decentralization process and their respective roles and readiness to implement fiscal decentralization. It will also assess the current fiscal decentralization policies, regulations, and procedures and find-out gaps in the existing policies, regulations and procedures. It will also examine the current status of the fiscal decentralization process as required under the decentralization program, recommend fiscal decentralization policies, regulations, and procedures to fill the gaps to implement a fiscal decentralization in a fully-fledged manner and develop at least one fiscal decentralization policy, regulation, or procedure.

• Tasks & Responsibilities

The consultant will work collaboratively with other members of the USAID Liberia LEAD team to help achieving progress against project objectives and expected results.

The Specific responsibilities include:

Tax Expenditure Report

1. Undertake policy review pertaining the granting of tax concessions.

• Conduct an assessment of Liberia’s tax concession regime – legal basis and processing of granting tax concessions.
• Review all policies, legislations, agreements, contracts, and other documents that grant tax concessions and document same by tax types, type of concessions and beneficiaries.

1. Establishment of the benchmarked tax system

• Define the benchmarked tax systems with respect to the various derogations identified in the policy review.
• Align the various tax concessions with their respective provisions in the benchmarked tax system.

1. Develop tax expenditure report analytical framework:

• Using the benchmarked tax system and the derogations or concessions identified from the policy review, develop tax expenditure report framework and structure (year and tax types to be covered in the report), methodology and approaches to be employed, and annotated outline of the report.

1. Gather tax expenditure data.

• Conduct data specification exercise (i.e., identifying data sources, and means of obtaining data), undertake data collection, and analyze data.

1. Estimate tax expenditure amount

• Estimate the value of the derogations from the benchmarked tax systems by tax type, concession-wise and beneficiaries.
• Draft tax expenditure report.
• Prepare a power point presentation to submit the report for discussions with various stakeholders.

VAT Policy Analysis

1. Update and finalize the microsimulation model for GST/VAT.
2. Estimate the revenue impact of the proposed VAT vis-à-vis current GST.
3. Train LRA and MFDP officials on the use of the models and potential revenue estimation.
4. Support LRA and MFDP analysts in preparing policy briefs for leadership.

Fiscal Decentralization Policies, Regulations and Procedures

1. Identify the lead institutions that are involved in the fiscal decentralization process and their respective roles and readiness to implement fiscal decentralization.
2. Review the current fiscal decentralization policies, regulations, and procedures and find-out gaps in the current policies, regulations and procedures.
3. Recommend fiscal decentralization policies, regulations, and/or procedures to fill the gaps to implement fiscal decentralization in a fully-fledged manner.
4. Prepare at least one policy, regulation and/or procedure for fiscal decentralization.

• Deliverables

Tax Expenditure Report

• Final Report on GOL Tax Expenditure on the main findings and recommendations for future policy directions.
• Presentation of report findings to main stakeholders.
• Training of LRA and MFDP staff on tax expenditure estimation and reporting.

VAT Policy Analysis

• An updated VAT micro-simulation model ready for use by MFDP and LRA staff.
• VAT policy analysis completed, permitting LEAD and GOL staff to prepare policy briefs for senior leadership and the legislature.

Fiscal Decentralization Policies, Regulations and Procedures

• A report is prepared on the lead institutions that are involved in the fiscal decentralization process and their respective roles and readiness to implement fiscal decentralization.
• Current fiscal decentralization policies, regulations, and procedures are mapped, and gaps identified.
• At least one fiscal decentralization policy, regulation, and/or procedure developed.

Qualifications

Education and Experience

• A bachelor or master’s degree in economics, finance, or accounting.
• Strong foundation on fiscal policy, including taxation and fiscal decentralization.
• Strong quantitative skills, including the ability to work with financial data and statistical tools.
• Over 10 years of experience in the tax policy, tax administrations and fiscal decentralization with relevant actors in GOL.
• Experience with economic modeling including microsimulation modeling and estimation of the tax expenditure resulted from various tax concessions.
• Strong written and verbal communication skills.
• Capable of conducting research and preparing detailed reports and effectively communicating findings and recommendations to stakeholders.

Estimated Level of Effort per task

Please indicate in the subject line of your mail, application for the position of (Financial Expert).

Deadline for the submission of applications is January 26, 2024 at 5:00 PM.

Women and people with disabilities are strongly encouraged to apply.

The job advertisements are now live for Liberia LEAD. Interested candidates are invited to apply via this email:

LiberiaLEADRecruitment@dai.com