Statement_of_Work_Guatemala_Tax_and_Customs_Evaluation.docx

Statement of Work

Independent Consultant Guatemala Resource Mobilization for Tax and Customs Administration Introduction

The Millennium Challenge Corporation (MCC) is a U.S. Government corporation working with countries committed to just and democratic governance, economic freedom, and investing in their citizenry. In these selected countries MCC funds investment projects that will reduce poverty by alleviating the constraints to sustained economic growth. For more information on the MCC, please visit www.mcc.gov.

In Guatemala, MCC is implementing a $28m Threshold Program that includes the $2.6m Guatemala Tax and Customs Administration Activity. This activity is supported by the US Treasury Department’s Office of Technical Assistance (OTA) and is working with the Government of Guatemala’s (GOG) Programa Nacional de Competitividad (PRONACOM) to implement a set of strategic reforms to increase the efficiency of their tax and customs operations.

MCC’s Monitoring and Evaluation division (M&E) contracts independent evaluators to critically assess the results of MCC’s project investments and publicly disseminate these findings. This SOW describes an evaluation consultancy that MCC plans to fund.

Scope The consultant will independently evaluate the Guatemala Tax and Customs Reform Activity. This evaluation will review and assess the development, implementation and likely results of this Activity. It will also compile and document any lessons that may be drawn to improve the design and implementation of future activities of this sort. This evaluation and its findings may also be used to disseminate these and related findings, and to improve MCC’s and its partner government’s investment projects.

Background Program Development The Millennium Challenge Corporation granted the Government of Guatemala a Threshold Program with a total of $28 million of funding in April 2016. The GOG designated the Programa Nacional de Competitividad (PRONACOM – an existing government organization) to be the accountable entity responsible for the implementation of the Threshold Program.

The overall objective of the Threshold Program is to support reforms initiated by the Government to improve the quality and relevance of secondary education in Guatemala and to increase fiscal revenues to enable the Government to address the constraints to economic growth. The Threshold Program is composed of: an Education Project ($19.3 million) and a Resource Mobilization Project ($6.2 million).

The objectives of the Resource Mobilization Project are: (i) to support Government reforms to increase the availability of resources by improving the efficiency of tax and customs administration, and (ii) to strengthen the capacity of the Government to finance infrastructure via public-private partnerships (“PPPs”) in order to increase public funding allocated for social investment, principally education.

The Resource Mobilization project consists of two components:

a) Improving Tax and Customs Administration ($2.6 million)

b) Strengthening the Capacity to form Private Public Partnerships (3.6 million).

This Call Order will solely cover the independent evaluation of the Improving Tax and Customs Administration Activity (referred as Tax and Customs Activity or “project” from now on). A consultant (referred as “the Evaluator” or “Contractor” from now on) will be contracted to conduct the independent evaluation.

Tax and Customs Activity Development

The $2.6 million budget for the Tax and Customs Administration Activity is being implemented by two different entities: the Office of Technical Assistance (OTA) from the U.S. Department of the Treasury and PRONACOM. OTA is responsible for implementing $1.8 million[footnoteRef:2], while PRONACOM manages the remaining $800,000 to complement the OTA work. [2: MCC signed an interagency agreement with the U.S. Department of Treasury in 2013.]

The objective of the Tax and Customs Activity is to support government reforms to increase revenues by improving the efficiency of tax and customs administration. The Tax and Customs Activity description in the Threshold Program Agreement states that Grant funding will finance technical assistance to the Superintendencia de Administración Tributaria (“SAT”) to support the Government’s efforts to undertake institutional changes.

The design of this project preceded the “la línea”, a corruption scandal involving SAT officials[endnoteRef:2], which affected the emphasis and sequencing of the OTA technical assistance. While the Project objective has not changed, the la línea scandal and multiple changes in SAT leadership has caused significant evolutions in the project design. These changes are implicit in the annual workplans signed by OTA and SAT, which will be provided to the Evaluator. [2: The design documents of this project preceded a watershed event, one that affected the emphasis and sequencing of OTA technical assistance. Shortly after the issuance of the 2015 seaports report, the Public Prosecutor's office executed arrest warrants against the Superintendent of SAT and his predecessor, various managers and officers in the customs service, and the Vice President's Chief of Staff for participation in a customs fraud scheme called "La Línea." Subsequently, the Vice President, deprived by Congress of immunity, resigned. The arrests and those of the Director of Social Security and the Central Bank Governor provoked strong public and media outrage and street protests (said to be largely middle class) throughout the country. As a result of the investigations, multiple SAT high-ranking officials and other officials in the Guatemalan government (including the President) have been charged criminally and are awaiting trial. Since the inception of this project in 2015 there have been significant developments and staff turnover due to a massive corruption scandal in Customs. The massive Customs scandal has caused significant (negative) impact on SAT personnel, management and the public's perception of the tax administration.]

The following is the Tax and Customs Activity design as of August 2018, which is an evolution of the original project design found in Appendix 1. However, the design may continue evolving overtime depending on the needs/views of the SAT leadership and other factors.

Project Outputs and Outcomes

The Tax and Customs Activity is expected to provide the following outputs and outcomes in the short term:

Technical Assistance to Internal Affairs: Accountability and Transparency- Strengthen Internal Capacity for Anti-corruption.

1. Updated internal documents (e.g. Internal Investigation Policy, GAI Operations Manual)

2. Training on internal investigation and internal audit

3. Updated vetting process of potential hires and current employees

4. Updated process to deter corruption

Technical Assistance to Tax Audit Function: Improve Tax Administration Core Function (Tax Audit and other Verification Programs)

1. Assessment of compliance and risk modeling

2. Updated internal reports and template formats

3. Streamlining of Audit process

4. Analysis of Counter Review process

5. Developed continuous audit quality improvement process

6. Improved Annual Audit Planning process/compliance plans/program letter

7. Training

8. Improved effectiveness of the audit work

9. Enhanced managerial processes and engagement at front-line level

10. Accurate, fair and timely Tax Dispute Resolution Mechanisms

Technical Assistance to Customs Function: Strengthen Custom Administration

1. Improved valuation Database

2. Effective Reasonable Doubt process

3. Established Post Clearance Audit (PCA)

4. Enhanced Port security (physical and human controls)

5. Strengthened Integrated plan for freight control (Plan Integrado de Control de Carga “PICCA”)

6. Assessed IT System needs(MCC – not OTA)

7. Improved Risk Modeling and its application

8. Improved Customs Clearance Time monitoring

In the medium term, the Tax and Customs interventions are currently expected to produce the following outcomes:

· Effective and efficient Risk Management

· For tax: Properly selected returns to tax audit

· For customs: effectively assigned shipments to green, yellow or red channels

· Improved tax auditing and custom inspections

· For tax: tax audits better detect underreported returns and apply meaningful penalties

· For customs: red channel inspections and PCAs produce higher revenue-related adjustments

· Effective and efficient administrative dispute resolution

· For tax and customs: improved sustention on appeals, faster resolution and fewer appeals

· Improved identification, investigation and prosecution of tax fraud

· For tax: investigations that are submitted to prosecution are effectively and timely prosecuted

In the long run, the Tax and Customs Activity is expected to increase voluntary compliance, which will result in:

· Increased tax revenue

Program Logic

An official program logic was never developed for this activity. However, the program logic for the Tax and Customs Activity is predicated on a model of inducing voluntary compliance of tax payers (including tariffs and VAT revenue from customs). A taxpayer is more likely to voluntarily comply when they expect that the total payment (tax liability, fines, tax preparation, cost of incarceration and other costs) for accurately declaring and paying their tax liability is less than the total payment that would result from attempting to evade their full tax liability.

Most of the actions of the project are focusing on inducing voluntary compliance, which holding other things equal, would translate into an increase in tax revenue. The project is also concerned with reducing tax payer compliance costs (especially in customs, where it can result in slow clearance times that can be very costly for traders and can in the long run reduce trade and tax revenue from trade) and improving the integrity of SAT personnel through support to the Internal Affairs Unit.

The degree to which voluntary revenue compliance is induced by the revenue administration system will depend on the tax authority ensuring effective and efficient:

1. Declaration filing (For tax: promoting that individuals do not avoid taxes by not filing or by fraudulently distorting their taxable income. For customs: limiting smuggling)

2. Risk-based selection (For tax: promoting inaccurate declarations are selected for auditing. For customs: green versus red channel)

3. Auditing (for tax) /inspection (for customs)

4. Appeal process

5. Collection of adjustments and application of penalties

6. Identification, investigation and prosecution of fraud

The Tax and Customs Activity is trying to improve one or more of the areas listed above. In addition, underlying all of this is the anti-corruption and capacity-building technical assistance for SAT’s Internal Affairs Office, whose objective is to vet applicants to hire and detect, deter, and redress circumstances where staff have not faithfully executed their duties.

B.2. Objective The objective of the evaluation is to assess the relevance, implementation and effectiveness of MCC’s support for revenue administration. This includes assessing progress achieving stated objectives and outcomes as stated in the program logic (a program logic is currently being developed to align with OTA’s workplans).

The evaluation findings will seek to determine whether the project was designed to be effective given the Guatemala context and the fact that the Tax and Customs Activity was implemented by OTA through an interagency agreement. It will also provide recommendations on how MCC can enhance its support to tax policy and administration for future interventions.

B.3. Evaluation Questions The Evaluator will review and propose improvement to the following evaluation questions.

Relevance:

1. To what extent have the project objectives been aligned with critical tax and custom-related challenges in Guatemala?

2. To what extent have the project interventions (including assessments and recommendations made by OTA during implementation) been aligned with the existing body of knowledge on best practice in tax policy and administration and adjusted to the political and socioeconomic context of Guatemala? If so, how? Did the underlying assumptions hold through?

3. To what extent were the project activities coordinated with other donor activities (e.g. USAID, IMF, World Bank project) to ensure project complementary and reduce duplication?

Effectiveness:

1. What is the share of evaluable sub-activities versus non-evaluable sub-activities as determined by the review of the program logic and evaluability assessment? Why are these sub-activities non-evaluable? What steps can MCC take in the future to minimize the share of non-evaluable sub-activities? [This assessment should include any sub-activity in the original project design (or in later project design revisions) where resources were spent, even if these sub-activities were truncated or terminated before delivering any outputs/outcomes].

2. To what extent has the project resulted in changes in behavior or practices of the SAT personnel?

3. To what extent has the project produced the intended outcomes and met its objectives? To what extent can this be attributed (qualitatively) to the MCC program (versus other factors)?

a. What were the barriers and opportunities to reducing corruption and strengthening SAT’s ability to detect and punish corrupt actions and improving internal accounting and managerial controls? Were these barriers taken into account in the project design?

b. How have the processes of administrative audit and appeal been improved in terms of quality and timeliness?

c. What improvements have been made to the internal auditing process and managerial controls?

d. How has SAT improved its risk management in Customs?

e. To what extent are the interventions likely to contribute significantly to the project objective of “increasing tax revenue (without impeding trade)”? Please clarify why or why not.

4. What implementation problems has the project faced and how effectively have MCC/OTA addressed them?

5. To what extent has the Government of Guatemala made progress to the achievement of the Policy Milestones established in the Threshold Program Agreement?

Desk Review of Existing Data Sources The evaluation should include a document review, including review of the following documents: project founding documents, OTA work plans, monthly reports, manuals and other product deliverables. The evaluator should seek to build off the existing information and data sources, fill in any critical gaps by collecting information as necessary to produce a comprehensive final evaluation report. MCC, PRONACOM and OTA will facilitate access to SAT administrative data.

Key Informant Interviews and Focus Groups An initial round of key informant interviews may be needed to review and update the program logic, which will be used to identify “evaluable” versus “non-evaluable” activities. Similarly, key informant interviews and focus groups may be necessary to refine evaluation questions especially process related evaluation questions, such as determining the definition of success, and how different stakeholders view success.

Site visits

· Guatemala SAT offices

· Washington DC offices

· Ports (3): Puerto Quetzal, Santo Tomas de Castilla y Puerto Barrios

C.1. Roles and Responsibilities

A. Independence:

MCC’s Policy on Independent Evaluations. Based on the 1991 DAC Principles for Evaluation of Development Assistance, MCC’s Evaluation Policy requires independent evaluations of each MCC project. MCC’s implementation of this independence policy adheres to these principles, especially the following: “Impartiality and independence will best be achieved by separating the evaluation function from the line management responsible for planning and managing development assistance.” (P.6.)

Organizational Conflicts of Interest. MCC-M&E is responsible for adhering to our policy-driven requirements for independence. These requirements are distinct from Organizational Conflicts of Interest (OCI) proscribed in the Federal Acquisition Regulations. Interpretations and enforcement of the OCI statutes are the remit of our Office of General Counsel.

Independence of Evaluation Team. Evaluation team members must be impartial and therefore should not have contributed to the design or implementation of the project being evaluated. In cases where individuals or firms that have worked on the project are proposed to be part of the evaluation team, a justification and independence risk mitigation plan must be provided to MCC for consideration.

The Independent Evaluator’s Role. To remain consistent with the principles of independent evaluations during project planning and implementation, the independent evaluator’s feedback is restricted to reporting evidence and findings. Recommendations shall not be made before completing a final evaluation as they can influence project planning or implementation, thereby jeopardizing the independence an evaluation. Prescriptions and recommendations may be included in final evaluations.

Real-time feedback to project implementation. MCC supports monitoring and evaluation activities intended to provide feedback on how to improve program planning and implementation. But this support shall be separate from the independent evaluator. Any contribution of the Independent Evaluator to this feedback shall be limited to reporting evidence and findings. Any exceptions to this rule must be approved in advance by the EMC.

B. MCC & PRONACOM Responsibilities: The MCC, PRONACOM, along with the Independent Evaluator, play critical roles in designing, implementing, and disseminating the independent evaluations. The MCC and PRONACOM roles are as follows (For further detail see Evaluation Management and Review Process):

1. Millennium Challenge Corporation (MCC): MCC is responsible for oversight of the Independent Evaluator and quality control of evaluation activities, including the following specific responsibilities:

a. Assess when a program is ready for evaluation planning through evaluability assessment;

b. Determine what program components (Project(s), Activities, Sub-Activities) will be covered by the evaluation;

c. Set the evaluation questions to achieve accountability and learning objectives;

d. Build buy-in and ownership of the evaluation;

e. Contract and Supervise the Independent Evaluator;

f. Conduct quality reviews of all evaluation products (reports, questionnaires, etc.);

g. Facilitate public dissemination efforts to inform decision-makers on learning generated by the evaluation;

h. Oversee preparation of any public-use data that ensures appropriate balance of enabling verification of analysis and broad use of the data with adherence to promises of confidentiality to survey respondents; and

i. Determine the evaluation budgets.

2. PRONACOM (Programa Nacional de Competitividad de Guatemala) and country partners: PRONACOM and country partners are responsible for building local ownership and commitment to the evaluation, oversight of the data collection firm, and quality control of evaluation activities, including the following specific responsibilities:

a. Assess when a program is ready for evaluation planning through evaluability assessment;

b. Set the evaluation questions to achieve accountability and learning objectives;

c. Build buy-in and ownership of the evaluation;

d. Manage the data collection firms;

e. Conduct quality reviews of all evaluation products (reports, questionnaires, interview protocols etc.); and

f. Facilitate public dissemination efforts.

Independent Evaluator: The Independent Evaluator is responsible for the overall design, implementation, and dissemination of the evaluation, including the following specific responsibilities:

a. Develop the most rigorous evaluation design feasible given rules of program implementation (Tasks 1 and Task2)

b. Support MCC and PRONACOM to build buy-in and ownership of evaluation. (Task 2 and Task 3)

c. Develop evaluation materials that are held to international standards (Task 4)

d. Ensure Institutional Review Board clearance of survey and interview protocols as applicable (Task 4)

e. Manage the data collection conducted under this contract ( Task 5)

f. Ensure data quality during collection and entry through supervision and management (Task 5)

g. Lead data cleaning, analysis, and interpretation of results (Task 5 and Task 6)

h. Provide technical review of data collection activities managed by PRONACOM that will provide data for this evaluation (Task 5)

i. Produce high quality, credible, transparent evaluation report(s) (Task 6)

j. Lead preparation of public-use data that ensures appropriate balance of enabling verification of analysis and broad use of the data with adherence to promises of confidentiality to survey respondents and interviewees as applicable (Task 7)

k. Lead public dissemination efforts (Task 7)

C.2. Tasks

Task 1: Assess Evaluation Plan

a. The Evaluator should conduct a field visit as necessary.

b. Since the design of the Tax and Customs Activity has been fluid and has significantly changed overtime, the Evaluator shall first review and update the program logic model to determine which sub-activities are “evaluable” versus “non-evaluable”. The Evaluator should document all the sub-activities where resources were spent (an estimated budget), even if these sub-activities were truncated or terminated before producing outputs/outcomes. The Evaluator should also identify a list of indicators necessary to monitor the evaluable activities throughout the rest of the life of the project. The updated program logic and indicator framework will be an input to the Evaluability Assessment.

c. The Evaluator shall produce an Evaluability Assessment Report guided by the Evaluability Assessment Tool (see solicitation attachment – note: use the tool as applicable) to assess the quality, completeness, and/or appropriateness of the Problem Diagnostic, Program Logic, Risks & Assumptions, Monitoring Indicators, and Proposed Evaluation Questions. The report should aim to convey the Evaluator’s overarching assessment of the coherence of the design of the Tax and Customs Activity, and the plans for an evaluation.

Task 2: Develop Evaluation Design Report

· In consultation with MCC and PRONACOM, the Evaluator will focus on what s/he determined as “evaluable sub-activities” (through the review of the program logic and evaluability assessment) to design an evaluation focused on these sub-activities.

· The Evaluator shall conduct missions to the field as needed to discuss project design and implementation issues to inform the evaluation design, as well as engage local stakeholders (PRONACOM and Implementing Entities, as well as local government) on the proposed evaluation. This includes hosting local meetings to develop/refine research questions, assess appropriate and feasible quantitative and qualitative evaluation methodologies, develop evaluation timeline, and build local stakeholder commitment to the evaluation design.

· The Evaluator will develop a Work Plan with expected deadlines for deliverables. Any revisions to the Work Plan will be submitted in the Evaluator’s Progress Reports.

· The Evaluator will develop the Evaluation Design Report. The Evaluation Design Report outline will be developed in consultation with the MCC M&E lead. Please reference the Evaluation Design Report Outline as a guide. This will include the Evaluator reviewing the “evaluation questions” and proposing changes if appropriate.

· As per MCC’s Gender Policy and Gender Integration Guidelines, the Evaluator will ensure that evaluation design, data collection requirements, and analysis address gender and other social differences as appropriate (if any). This involves including research questions that address social and gender dimensions of the program logic, assumptions, and project design; disaggregating impacts by gender, age, income, and other social difference (e.g. ethnicity) as appropriate; including special modules or studies as needed.

· The Evaluator will document feedback from MCC, OTA, PRONACOM, SAT and other local stakeholders and the response to that feedback in an annex to the final report. In order to obtain feedback, the Evaluator may lead local meetings and/or virtual reviews of the Design Report by PRONACOM and Implementing Entities.

· The Evaluator is responsible for allowing any key local stakeholders the opportunity to submit a public Statement of Difference or Support, as agreed with MCC and the PRONACOM/designated representative.

· The Evaluator will submit the Evaluation Design Report (and Executive Summary in Spanish and English) to MCC and may be asked to present to the Evaluation Management Committee in Washington, D.C. as well as to PRONACOM and SAT in Guatemala City. All feedback and response to feedback will be documented by the Evaluator in an annex to the final report.

· MCC may: (i) select to obtain external peer review; and (ii) make the Report and peer reviews public on the MCC website.

· The Evaluator will produce a Nesstar Metadata file (See Attachments) summarizing the final Evaluation Design Report for dissemination on the MCC Evaluation Catalog. Prior to publication, the Evaluator should review the current version of MCC’s Evaluation Microdata Guidelines for guidance on preparation of public documentation that links to microdata to reduce re-identification risk.

· The Evaluator will continue to maintain the Evaluation Design Report as the evaluation develops. The Evaluation Design Report will remain a living document that is updated by the Evaluator as necessary and resubmitted to MCC as necessary.

Task 3: Monitor Project implementation The Evaluator is responsible for quarterly monitoring of project implementation to ensure selected indicators and other monitoring data needed for the evaluation are being collected by PRONACOM, OTA or SAT as applicable. This requires collaboration with MCC, PRONACOM, OTA and SAT and may require setting up a process for sharing this information in a routine basis.

Task 4: Develop Evaluation Materials

· If required in the Evaluation Design Report, the Evaluator will develop or provide technical support on development of TORs to contract a local firm or an individual consultant to conduct data collection or data extraction of existing sources. This firm or individual consultant will be funded with PRONACOM funds (outside of this contract).

· The Evaluator will lead development of any necessary instruments for primary data collection (including questionnaires, interview protocols) and/or a data extraction approach for existing sources (as appropriate).

· The Evaluator will develop interview materials in Spanish, unless otherwise agreed with MCC. When necessary, the Evaluator will utilize existing instruments to improve coordination across MCC independent evaluations for meta-analysis. The Evaluator is responsible for pretesting instruments during their development.

· The Evaluator is responsible for ensuring any interviews last no longer than 120 minutes without written consent from the Evaluation Management Committee.

· The Evaluator will document feedback from local stakeholders and respond to the feedback. In order to obtain feedback, the Evaluator may lead local meetings and/or virtual reviews of the Evaluation Materials by PRONACOM and Implementing Entities.

· The Evaluator will submit the Evaluation Materials to MCC and may be asked to present to the Evaluation Management Committee. All feedback and response to feedback will be documented by the Evaluator.

· The Evaluator is responsible for the quality of the Spanish instruments and protocols.

· The Evaluator is responsible for developing and overseeing all data collection (qualitative and quantitative, as applicable) and entry protocols and implementation. This requires reviewing the current version of MCC’s Evaluation Microdata Guidelines and ensuring appropriate Institutional Review Board (IRB) review and approval of research protocols, interview instruments, and informed consent procedures (see MCC Informed Consent Statement Template (See Attachments)

· The Evaluator should assess the local IRB requirements and determine whether or not additional, international-level IRB approval is required in order to ensure adherence to international standards.

· If there are local requirements, the Evaluator must abide by them.

· If the local IRB is HHS registered, no additional IRB is required.

· If the local IRB is not HHS registered, the Evaluator also needs to sub-contract an HHS registered IRB.[footnoteRef:3] [3: HHS registered IRBs are found here - https://ohrp.cit.nih.gov/search/search.aspx?styp=bsc]

Task 5: Undertake data collection

· The Evaluator is responsible for conducting data collection as determined in the Evaluation Design Report. The Evaluator is responsible for pilot testing the interview instruments and field procedures (if applicable). This must be managed in coordination with MCC and PRONACOM.

· The Evaluator is responsible for conducting and documenting quality control checks of data as it is collected and entered in order to reduce data collection and entry error (if applicable).

· If required by the Evaluation Design Report, the Evaluator is also responsible for providing technical assistance and technical oversight to the local firm or local consultant that PRONACOM may contract to support additional data collection and/or the extraction of data from existing resources (e.g. SAT databases). For SAT administrative data, the Evaluator will need to work with MCC, PRONACOM, OTA and SAT to gain access to the data and get permission to use and disseminate the data.

· The Evaluator is responsible for establishing a system for frequent communication with the local firm or the local individual consultant contracted by PRONACOM through email, phone, and site visits. The Evaluator shall communicate with MCC Lead and PRONACOM if it encounters any issues managing this local firm or local individual.

· The Evaluator is responsible for preparing the microdata according to MCC’s guidelines.

Task 6: Develop Final Report

· The Evaluator is responsible for developing the Final Report. The Final Report outline will be developed in consultation with the MCC M&E lead. Please reference Final Report Outline (See Attachments) as a reference.

· The Evaluator will ensure that the final analysis includes gender and social analysis (as applicable) as described in the evaluation design report, including examining differences in characteristics by gender, age, income and other social variables as appropriate.

· The Evaluator will document feedback from local stakeholders and respond to feedback in an annex to the final report. In order to obtain feedback, the Evaluator may lead local meetings and/or virtual reviews of Final Report by PRONACOM and Implementing Entities.

· In accordance with See Attachments, the Evaluator is responsible for allowing any key local stakeholders the opportunity to submit a public Statement of Difference or Support, as agreed with MCC and the PRONACOM/designated representative.

· The Evaluator will submit the Final Report to MCC and present to the Evaluation Management Committee. All feedback and response to feedback will be documented by the Evaluator in an annex to the final report. Any revisions to the report deemed necessary by the Evaluator will be incorporated into the final draft.

· MCC may: (i) select to obtain external peer review; and (ii) make the Report and peer reviews public on the MCC website.

Task 7: Disseminate Final Results

· Once the final report is reviewed by the Evaluation Management Committee, the Evaluator is responsible for:

· Presentation at MCC headquarters

· Presentation at OTA headquarters (U.S. Department of the Treasury)

· Presentation at PRONACOM/designated representative headquarters

· The evaluator will produce an Evaluation Brief (4-page document) following MCC’s template.

· The Evaluator should review the current version of MCC’s Evaluation Microdata Guidelines for guidance on preparation of public documentation that links to microdata. All endline materials (questionnaire(s), informed consents(s), research protocol(s), updated Metadata (as needed), internal and/or public-use Final Report, Data Package Worksheet, public-use and/or restricted access microdata files and analysis code) should be submitted as a deliverable package.

· The Evaluator will update the Nesstar Metadata as appropriate for the MCC Evaluation Catalog.

· The Evaluator will also be responsible for reviewing any materials developed by MCC public relations for dissemination on the MCC website for quality assurance.

· Participation in other MCC-financed dissemination and training events, such as MCC M&E Forum and MCC Evaluation Summits.

(End of SECTION C)

D. Deliverables The Evaluator should be aware that all final products (for example: Design Report, Interview Materials, Datasets, Final Reports) of the evaluation will be made publicly available on the MCC website as indicated below. Each of these final products are subject to MCC-facilitated peer review in order to assess the quality of the final product. In addition, all deliverables intended for public use must be Section 508 compliant – http://www.section508.gov.

The Independent Evaluator is responsible for ensuring that all public release documentation are reviewed to minimize any risk to respondent confidentiality. This may require submission of internal use only and public release reports.

In addition to the required reporting, including the quarterly progress report, the Evaluator is responsible for the following deliverables:

(not counting annexes)

Develop Evaluation Design Report

SOW, Trip Report for each country visit

(4)

(4)

Presentation materials; updates to Nesstar template (as necessary)

Due dates for all deliverables will be discussed with MCC and then included in the work plan and deliverable schedule during the inception period. The consultant shall propose due dates in the proposal and methodology.

The work plan must include a timeline as well as estimated LOE for each deliverable.

When provided, the consultant must follow MCC-provided templates and guidelines for specific deliverables, such as Trip SOWs, Design Reports, and data files.

E. Period of Performance

MCC intends to fill this consultancy as a long term consultancy with a base period of two (2) years and three (3) months. The level of effort to complete all the tasks included in the scope of work is estimated as 1400 hours. MCC does not guarantee that this level of effort will not decrease.

The overall anticipated period of performance of this contract is as follows:

Base Period (2 years and 3 months): July 2019 – September 2021

F. Place of Performance

The consultant shall perform services in Guatemala or at their home offices, as needed by MCC. During missions to Guatemala, the Evaluator shall perform services on PRONACOM’s project sites, as needed by MCC. MCC may also require the Evaluator to travel to MCC offices in Washington, DC from time to time to perform services.

G. Subcontracting

Occasional sub-contracting of tasks may be considered, but only when the COR agrees in advance that there are clear benefits to the government. The consultant is authorized to subcontract data collection, data preparation, social and gender analysis, and related services as needed. The overall costs for subcontracting shall not exceed 25% of the consultant’s total negotiated unloaded direct labor cost.

H. Other Requirements International travel may be required to Guatemala and the United States. The Consultant may be requested to mobilize on a short notice.

I. Timing and Reporting All formal communication with MCC, including reports, will be submitted to the Contracting Officer’s Representative (COR)/Project Monitor (PM). The COR/PM for this requirement will be identified via separate correspondence.

The COR/PM will have technical responsibility for monitoring the contractor’s performance. The COR/PM will review and evaluate the contractor’s performance, and also will coordinate any communications with relevant counterparts and other donor agencies and organizations.

Any changes in the terms of the Call Order will be made in writing and approved by the Contracting Officer. No representation of the COR/PM shall serve as a basis for an alteration in the general scope of this Call Order or of the terms and conditions of the Call Order unless confirmed in writing by the Contracting Officer. The contractor must communicate with the Contracting Officer on all matters that pertain to the Contract terms. Proceeding with the work without proper contractual coverage could result in nonpayment for that work.

The designated Contractor would be expected to coordinate with local authorities responsible for MCC project implementation as well as other donors, where relevant. However, Contractor would report directly to the designated MCC COR/PM.

Appendix 1. Original Tax and Customs Reform Project Design

The objective of the Tax and Customs Activity is to support government reforms to increase revenues by improving the efficiency of tax and customs administration. The Tax and Customs Activity description in the Threshold Program Agreement states that Grant funding will finance technical assistance to the Superintendencia de Administración Tributaria (“SAT”) to support the Government’s efforts to undertake institutional changes to:

· Implement a strong risk management framework and strategy that integrates internal taxes and customs.

· Institute an effective Customs Post Clearance Audit program as an extension of Customs controls.

· Improve control of the physical movement of people and cargo, including the assessment of the viability of an electronic container tracking system at the ports.

· Implement a process of continuous improvement in audits and the administrative process for the collection of tax debts, including training of personnel if necessary, using the Large and Medium Taxpayers Office as a pilot.

· Assess the adequacy of information technology systems, with respect to international practice, and, if necessary, create an investment proposal for improvement of the systems documenting the cost/benefit analysis that supports such proposals. Identify and implement interim measures to improve access to and usefulness of information currently available to the SAT.

· Identify shortcomings in detection and application of punitive measures and sanctions for the participation of officials and employees of SAT in illicit and ethically questionable acts and support the institutionalization of improved system of control to prevent and punish such acts, as well as train personnel in this subject.

· The Government of Guatemala is also considering legal reforms that will allow access by the SAT to bank records with the objective of improving tax control and reducing the space for tax evasion, as well as strengthening other faculties of the SAT. The Program will provide limited support to the Government to review draft legislation and estimate the potential impact on compliance and revenues, as well as identifying the costs and relevant administrative aspects and providing the Government advice during its consultations with stakeholders. If the legislation is enacted, the Program will support the Government to implement the approved changes.

Project Outputs and Outcomes The outcomes for the Tax and Customs Activity as stated in the project documents are:

Medium-term Outcomes

· Increased expected penalty for tax evasion (probability of being caught*penalty)

· Increased revenue collected from proposed audit adjustments / total adjustments proposed

· Increased customs revenue collection Short-term Outcomes

· Reduction in audit rejection rate by internal review board

· Improve rate of agreement with audit adjustments, reducing the number that pursue administrative and judicial appeals.

· Decrease in customs clearance times (Time Release Study)

· Decrease in perception of corruption of customs officials amongst importers and exporters and tax officials among citizens and businesses In the long run, the Tax and Customs Activity is expected to increase voluntary compliance, which will result in:

· Increased tax revenue The Monitoring and Evaluation Plan for the Guatemala Threshold Program will be updated in the coming months, but currently has the following indicators to monitor the Tax and Customs Activity:

In addition to output and outcome indicators related to the Tax and Customs Activity, the table above lists the following Policy Outcome Indicator[footnoteRef:4] for the Tax and Customs Activity is: [4: ]

· Tax revenue as a percent of GDP.

This Policy Outcome Indicator measures advancement in Policy Milestones. Policy Milestones are policy actions necessary to achieve significant progress toward the alleviation of the identified constraints to growth. Some of these policy actions are outside of the control of the executive branch and rely on actions by the Congress of the Republic of Guatemala. The Program will contribute to the likelihood that these milestones will be achieved, but the Program is intended as support to Government efforts and on its own will not ensure that all of the policy actions necessary are taken. The Policy Milestones for the Tax and Customs Project are:

· Implement measures to increase tax revenues from foreign trade (i.e., customs duties and Value Added Tax (VAT) from imports) while reducing customs clearance times and improve transparency, such as:

· Implement measures to improve control of the physical movement of persons and cargo, including an electronic container tracking system in the ports.

· Implement a strong Risk Management framework and strategy that integrates internal taxation and customs.

· Institute an effective Customs Post Clearance Audit program as an extension of Customs border controls.

· Implement measures to reduce tax evasion, such as:

· Improvements in audit and the administrative processes for the collection of tax debt to reduce the rate of rejected audit cases.

· Amend the bank secrecy law to (i) comply with international commitments related to tax administration; (ii) provide the Superintendencia de Administración Tributaria with additional authority and tools to audit tax filings and (iii) allow the government adequate basis for broad participation in bilateral and multilateral tax information exchange and mutual assistance agreements.

· Adopt measures to detect and punish corrupt actions and to improve internal accounting and managerial controls.

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