Fiscal administration development project

The evaluation covered the period FY85-8/89. Except in the area of collections, the project had made only minimal progress in implementing its original plans when the GOE enacted a tax administration reform law in 12/88 which required a rethinking of project strategy. The other programs, procedures, and organizational relationships introduced under the original design are still in incipient stages of institutionalization, and the newly designed personnel system, manuals, and regulations have not yet been introduced at the operating level. Progress on mechanization has been "uncertain." Despite the changes in tax policy, the project"s objective to reorganize the DGR is still valid, and the GOE is expected to be receptive to further USAID/E assistance in this area. Assistance is particularly needed to reorganize the DGR computer system to reflect administrative changes resulting from the reform, to develop a central filing system, and to improve the physical working environment within the programming department. Overall, the 1988 tax reform is remarkably on track in both policy and tax administration, and reforms proposed for 1990 appear to be well thought out. The new taxes will generally represent a significant improvement over existing taxes and will also be easier to administer. However, while the project has the potential to play an important role in the tax reform effort, USAID/E should carefully examine administrative aspects of the new reform before committing to further funding. The project teaches the following lesson: When a project loses or appears to lose the high-level support which it had when it was initiated, the USAID should undertake a major review to decide whether the project should proceed or be canceled. Temporizing often leads to unproductive wheel-spinning and ultimate waste.