USAID - The U.S. agency for international development

Fiscal Reform

The U.S. Agency for International Development (USAID) is working to increase government efficiency and accountability and to improve citizen services through the creation of transparent tax systems.  Implementation of these systems will provide a solid foundation for revenue inflows and outflows and help further Bosnia and Herzegovina (BiH) on the path to membership in the European Union (EU).

The USAID program supports U.S. Government priorities to promote fiscal stability and reform the tax regime, which will help eliminate barriers to the growth of the private sector and encourage foreign investment.

Tax Administration Modernization Project (TAMP)                 Budget: $10.6 million
(January 2003 – June 2006)                Implementer: Development Alternatives Incorporated (DAI)

USAID, in cooperation with the U.S. Treasury, is working to modernize the tax administration in the Federation, Republika Srpska and Brcko District.  The project has assisted the tax administrations to:

• Implement a new taxpayer registration system that includes a single, smart-digit taxpayer identification number which helped clear the taxpayer rolls of fraudulent companies.
• Harmonize tax administration rules and regulations in BiH.
• Modernize and develop a self-assessment-based tax system to decrease fraud and corruption and increase revenues and compliance.
• Design, develop and implement hardware and software systems for new processes that reduce leakages, improve administrative efficiency and facilitate taxpayer compliance.

Additional activities that TAMP is currently working on include establishing a direct tax working group to help harmonize rates between the entities and Brcko District; reforming the profit tax; introducing new tax laws on personal income and real estate; completing a national data-communications network; implementing withholding tax and audit related systems; and improving audit and collection capabilities.

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