WASHINGTON, USA — The board of executive directors of the Inter-American Development Bank (IDB) has approved $100 million in financing to improve governance and institutional capacity at the Tax Collection and Customs Control Agency (ARCA, its Spanish acronym) and to strengthen tax revenue administration.
The project finances a comprehensive transformation — both functional and digital — based on four pillars:
- Improving ARCA’s management and institutional capacity through the redesign of tax processes, optimisation of human resources management, and enhanced coordination with other government agencies.
- Strengthening taxpayer services by improving citizen engagement processes, including registration, filings, inquiries, and complaints, among others.
- Implementing a comprehensive risk management system to enable data-driven tax control, segmented risk profiling, and greater transparency in audit processes.
- Digitally modernising ARCA, including a new data management model, upgrades to its technological infrastructure, and the development of its cybersecurity system, among other advances.
The program will help reduce the value-added tax (VAT) compliance gap and tax compliance costs through the digitalisation and automation of systems, as well as the adaptation of regulations, processes, and functions. It will also promote greater accessibility to tax services by focusing on digital inclusion and meeting the needs of different taxpayer profiles.
Approximately 19,000 ARCA staff will benefit from access to training and more efficient processes, and 6.8 million taxpayers and private sector actors will directly benefit from improved services and a more transparent tax administration.
The $100 million IDB financing has a 25-year maturity, a 5.5-year grace period, and an interest rate based on SOFR. The project will be implemented in coordination with a results-based loan from the World Bank.
This loan is the first operation under a new Conditional Credit Line for Investment Projects (CCLIP) of up to $600 million, aimed at strengthening the effectiveness, efficiency, and transparency of public revenue management in the country.