Announcement of Argentina to Improve Tax Administration with World Bank Support on April 15, 1992

FOR IMMELDIATE RELEASE ,World Bank 818$ H stret 'vW WAa r,11gton, D.C. '04 1 3, U.S A * Idepho l20.e 4 '7 I. '4 BANK NEWS RELEASE NO. 92/69LAC Contact: Ciro Gamarra (202) 473-8721 ARETNVA TO IRE9VE ThLADMIL VETRATION_WITHOR8Q SANX SUPPORT WASHINGTON, D.C., April 15, 1992 -- The World Bank has approved a $20 million loan to Argentina to help finance a projact to improve tax administration. The project will strengthen the administrative and technical capabilities of the Gener&l Tax Directorate (DGI). The project is vital to the gmvarnment'n reform proqram. The operation will consolidate, extend, and deepen key aspects of previes teohnical assistance efforts to increase revenues and provide sustain - iity, While addressing the neglected issue of increasing volt-tary complianri. These efforts have been assisted by two world Bank technical assistae-:a lo-', one for $18.5 million approved in June 1986 ane - for $6 '" --ved in January 1980. The prQ L .1ll address four major issues contributing to the inefficiency of the present tax administration systems the multipli: i- .y and frequenL ounLradiction of procedural laws and regulations -)n tax administration; weakness and excessive centralization of existing administrative systems and proceduresl poor service to the public, and ineffLL6ncy in collection and ternypr auditing. The World Bank loan will finance consulting services, training, office refurbishing, equipment and software, which DGI will use in its efforts to improve th" leal framework, administration, taxpayer services, collection systema n" v4payer auditing. The main benefit of the project will be a decrease in tax fraud and an increase in comp-liance, resulting in increased collections, conservatively 11Lwatedl at more than $1 million per ypar. The World Bank loan to the Republic of Argentina is for 17 years, including five years Of grace, with a variable interest r :te, currently 7.73 percent, linked to the gost of t Rank's borrowing. It d"Ho carries an annual commit- A- rharge of 0.25 p .ent on the undisburoed balance. '10TE; Money *-i' ree nr' expreesed in U.S. dollar equivalents.