Economic Growth & Governance Initiative Quarterly Report April-June 2011

EGGI's vision is to enhance GIRoA's capacity to develop and sustain a market environment that promotes economic growth and stability. EGGI's work is focused on several key areas, including policy support to the Ministry of Finance, program budgeting, provincial budgeting, tax administration, and control and audit office. In the third quarter of 2011, EGGI made significant progress in these areas. The program supported GIRoA negotiations with Russia over USD 470 million in debt relief and assisted the Ministry of Finance in negotiations with the International Monetary Fund (IMF) on the Extended Credit Facility. In program budgeting, EGGI delivered briefings to 695 civil servants from 35 budgetary units/line ministries on the approved 1390 budgets to improve budget execution rates. The program also supported the Ministry of Finance in preparing for July trainings for over 500 GIRoA officials in preparing budget submissions. In provincial budgeting, EGGI supported the Ministry of Finance to host a "Provincial Budgeting Policy Symposium," officially launching the Ministry's new provincial budgeting approach targeting provincial directorates in 34 provinces from five pilot line ministries. In tax administration, the Herat Medium Taxpayer Office (MTO) continued to realize significant gains in revenue collection, with a 213% increase in quarterly revenue collections compared to the same period in 2010. EGGI's technical assistance in management, audit, and taxpayer education was instrumental in achieving this success. The MTO also realized a 57% increase in filings at the close of the 1389 tax year compared to 1388. EGGI also made progress in its support for private sector development through the Doing Business Better Initiative (DBBI). The program increased Afghanistan's response rate to the World Bank's Doing Business Indicator (DBI) survey by 76%. EGGI supported DBI Working Groups to identify potential reforms to ease the Doing Business process in Afghanistan. In addition to these achievements, EGGI supported the Ministry of Commerce and Industries (MoCI) in prioritizing their legislative agenda for submission to the Ministry of Justice. The program also provided assistance in drafting and reviewing legislative documents, including amendments to the Agency Law, Business Naming Registration Procedures, and ACBR Regulation. Overall, EGGI's work in the third quarter of 2011 was focused on supporting GIRoA's goal of fiscal sustainability in the lead up to the 2014 transition. The program's efforts in policy support, program budgeting, provincial budgeting, tax administration, and control and audit office have contributed to significant gains in revenue collection and improved budget execution rates.