REQUEST FOR APPLICATIONS (RFA)

ASSESSMENT OF IMPACT OF QUASI-FISCAL CHARGES ON BUSINESSES IN SERBIA

Issuance Date: July 15, 2011
Deadline for Receipt of Questions: August 5, 2011 by 5 p.m. CET
Closing Date/Time for Submission of Applications: August 15, 2011 by 5 p.m. CET

SUBJECT:   Request for Applications (RFA) Number: RFA-2011-02

The USAID Business Enabling Program in Serbia (Project), a United States Agency for International Development (USAID)-funded contract implemented by Cardno Emerging Markets USA, Ltd., is seeking applications from qualified, legally registered US, Serbian, or a third country non-profit, for-profit, and non-governmental organizations (NGOs) for a grant to assess the impact of quasi-fiscal charges on businesses in Serbia.
The Successful Applicant will be responsible for ensuring achievement of specified grant objectives.
This RFA consists of the following sections:

  • Section 1 – Funding Opportunity Description
  • Section 2 – Award Information
  • Section 3 – Eligibility Information
  • Section 4 – Application and Submission Information
  • Section 5 – Application Review Information
  • Section 6 – Award and Administration Information
  • Section 7 – Annexes

Pursuant to 22 CFR 226.81, it is USAID policy not to award profit under assistance instruments. However, all reasonable, allocable and allowable expenses, both direct and indirect, which are related to the grant activity and are in accordance with applicable cost standards (22 CFR 226, OMB Circular A-122 for non-profit organizations, the Federal Acquisition Regulation (FAR) Part 31 for for-profit organizations, and OMB Circular A-21 for educational institutions), may be paid under the Award.

Subject to the availability of funds, the Project intends to provide between 1 and 1.4 million RSD in total funding to be allocated over a six month period.

The Project reserves the right to fund any or none of the applications submitted. Issuance of this RFA does not constitute an award commitment on the part of the Project, nor does it commit the Project to pay for costs incurred in the preparation and submission of an application. Further, the Project reserves the right to reject any or all applications received if such action is considered to be in the best interest of the US Government. Applications are submitted at the risk of the Applicant; should circumstances prevent making an award, all preparation and submission costs are at the Applicant’s expense.

Applicants should submit any questions concerning this RFA in writing, electronically, via email to grants@bep.rs  The deadline for receipt of requests for clarifications/explanations is August 5, 2011, by 17:00 hours Local Belgrade Time. No questions will be accepted after this date.

Applicants should submit applications in writing to: Zorana Gajic, electronically, via email at grants@bep.rs The Closing Date for submission of applications is August 15, 2011, and the Closing Time for Submission of Applications is 17:00 hours Local Belgrade Time. Late applications will not be considered.

Section 1 – Funding Opportunity Description

A. Background

The United States Agency for International Development (USAID) has awarded a contract to Cardno Emerging Markets USA, Ltd. (formerly Emerging Markets Group, Ltd.) for the USAID Business Enabling Project in Serbia. The purpose of the Business Enabling Project is to help the Government of Serbia (GoS) improve the competitiveness of the Serbian economy and its private sector businesses. The overall objective is to assist GoS policy makers, business representatives, experts, and others to improve the business enabling environment and macroeconomic framework. The activity provides technical assistance and training to improve the business enabling environment, support macroeconomic stability, further develop financial markets, and improve and increase business and financial management capacities within government and business. The Business Enabling Project is made up of four components:

1. Component 1 – Business Regulation and Economic Governance: Assist Serbia to improve its business regulation and economic governance, particularly in those areas where it performs poorly in international competitiveness and business environment rankings, so that it can better stimulate private sector growth and development and attract more foreign and domestic investment resources.

2. Component 2 – Macroeconomic Policy and Public Financial Management: Assist the GoS and the National Bank of Serbia to improve macroeconomic policy, public financial management, and financial stability. Support efforts to improve GoS capacity to develop and implement fiscal policy.

3. Component 3 – Financial Market Development: Support means to increase access to finance, including development of non bank financial institutions. Also, to support the development of Serbia’s capital markets through improvements in market governance, accounting and disclosure standards. Support Serbia in its efforts to reform accounting and audit standards and practices and assist it in implementing those reforms.

4. Component 4 – Business-Education Partnerships: Support improvements in business management education in Serbia, through support to public-private partnerships with private businesses and universities in Serbia and the US, to improve and broaden curricula in business management faculties, support exchanges between Serbian and US university faculties and students, and foster closer relationships between business management facilties and businesses in Serbia.

The purpose of this RFA is to solicit applications to support the Project in the achievement of its program objectives. To accomplish reforms in each of these areas the Project will help the Government of Serbia work closely with the private sector and outside experts to make reforms that improve business competitiveness.

B. Grant activity Description

There is a widespread practice used by a number of regulatory agencies to introduce different quasi-fiscal charges by the means of a broad range of various non-tax laws (regulating forests, waters, energy, environmental protection etc).  Additionally, local governments impose their own fees and charges unrelated to services or payers’ financial strength and reflecting little but local governments’ financial needs. As a result, a careful review of tax laws does not provide current and prospective investors with a nearly accurate idea of their total tax burden. Examples include charges for protection, usage and improvement of forests of general interest, environmental charges, land use charges and business display fee on the local level. These charges are levied indiscriminately, with no connection to use of forests, environmental pollution, etc., and they are being collected based on the companies’ turnover, which makes them typical taxes, only obscured and hidden in unlikely laws.

The Project will help to provide one simple, yet much needed, step in solving this issue: create an inventory of charges with an analysis of their impact on several typical types of businesses. This tool will allow for monitoring of the level of the hidden taxation and its changes in time.  It will help policy makers and the business community identify the charges that should be eliminated.  The Project intends to provide support to the Ministry of Finance (MoF) and Office for Regulatory Reform to develop legal and procedural solutions that will minimize harm to the economy done by quasi-fiscal charges and make sure no new ones are introduced in the system without being properly discussed with the business community. This should decrease the financial burden on businesses and increase their legal security.

The Successful Application will cover the following issues:

1. Create an inventory of quasi-fiscal impositions on businesses including:

  • All non tax revenues (with exception of wage contribution) payable by businesses and introduced by the National Parliament, Government of Serbia and ministries, if the payable amount is not in direct correlation with the right obtained;
  • All non tax revenues introduced by the regulatory bodies if the payable amount is not in direct correlation with the right obtained;
  • Charges for utilities whose prices are subject of central and/or local government control if rates applied on businesses exceed those paid by physical persons;
  • Local government controlled fees and charges if the payable amount is not in direct correlation with the right obtained;
  • Other relevant fees and charges.

2. Analyze quasi-fiscal fees and charges imposed on businesses, indicating for each of them:

  • When it was introduced and by which legal act it has been introduced?
  • How the amounts due are calculated and based on which legal act?
  • Changes in rates and other key elements (such as scope of applicability) in the past three years?
  • Which ministry exercises the line responsibility?
  • Who collects the revenues?
  • To whose budget the revenues belong and if the revenue sharing is envisaged? Indicate agency sharing it and the ratio;
  • What rights or services, if any, do business receive in exchange for the fee?
  • Share of that revenue in the budget of the relevant public authority;
  • Description of the process of administering the fee/charge and general assessment of the administrative impact of compliance, with the emphasis on the time it takes businesses to comply with payment requirements and covering other considerable non-financial compliance burdens imposed on businesses.

Please note that fees and charges that are marginal cost to vast majority of business i.e., not more than 0.1% of their annual turnover, do not need to be analyzed as thoroughly as stated here. However, if they pose significant administrative burden on businesses, that administrative burden should be described in details.

3. Assess financial impact of the quasi-charges and fees on business sector (For locally administered fees and charges, this should reflect the typical way the fee/charge is administered and should broadly present the most important differences in practices employed by different local governments, without discussing in details policies of individual local governments)

  • Discuss differences in impact of quasi-fiscal charges and fees based on size, sector, region and other relevant parameters;
  • Define at least five representative types of businesses and conduct an assessment of the impact of quasi-fiscal fees and charges on them, for the current year and retrospectively for last three years (to account for locally administered charges and fees, define the typical local government in terms of local own source revenues policies). Representative types of businesses should be selected with the reference to the statistics of business entities and should include different sizes, sectors and regional locations of businesses;
  • Make this assessment web-based and freely accessible for at least two years after the award of the grant;
  • Update assessment of quasi-fiscal charges on pre-defined categories of businesses during the period of at least two years after the award of the grant.

4. Propose elimination, streamlining and/or other changes in the regime of quasi-fiscal impositions on businesses as deemed suitable

  • Develop, based on analyses described above, a set of recommendations for streamlining the system of fees and charges, taking into consideration the impact on the public revenues and on business sector.

Expected Deliverables:

  • Report on state of quasi-fiscal taxation of businesses with following components:
    • Inventory of quasi-fiscal impositions on businesses
    • Analysis of quasi-fiscal fees and charges imposed on businesses
    • Assessment of the financial impact of the quasi-charges and fees on business sector
    • Recommendations for elimination, streamlining and/or other changes in the regime of quasi-fiscal impositions to be prepared within three months from the beginning of the project implementation.
  • Web-based monitoring of the level of quasi-fiscal impositions on business on at least five representative types of businesses, to be implemented within six months from the beginning of the project implementation.

Section 2 – Award Information

Subject to the availability of funds, the Project intends to provide between 1 and 1.4 million RSD in total funding to be allocated over a six month period. The anticipated period of performance of the grant is expected to begin in the fall of 2011. The Project anticipates awarding one Fixed Obligation Grant under this RFA. Under a Fixed-Obligation Grant, all payments will be a fixed-sum payable upon completion of deliverables, which will be defined in detail during grant agreement negotiations.

Section 3 – Eligibility Information

Eligible organizations shall be able to comply with and achieve the proposed Program Description, Tasks, and Results and have a satisfactory performance record and record of integrity and business ethics.
Eligible organizations include legally registered US, Serbian, and third country non-for-profit, for-profit, and non-governmental organizations (NGOs).
Prior to the award of grant under this RFA, successful Applicants will be required to sign a Certification Regarding Terrorist Financing certifying that the Applicant’s organization does not provide and has never provided assistance to terrorists for terrorist activities. Successful Applicants may also be required to sign other Certifications as applicable to the award. The Certifications are attached as Annex 1 of this RFA.

Ineligible organizations include:

  • Public International Organizations;
  • Entities that have misused USAID funds in the past, organizations that advocate, promote or espouse anti-democratic policies or illegal activities;
  • Political parties or institutions;
  • Organizations that intend to use the grant for religious objectives;
  • Organizations that are on the list of parties excluded from federal procurement and non-procurement programs or the United Nations Security Sanctions Committee.

Section 4 – Application and Submission Information

Applicants should submit applications in writing to: Zorana Gajic electronically, via email at grants@bep.rs The Closing Date for submission of applications is August 15, 2011, and the Closing Time for Submission of Applications is 17:00 hours Local Belgrade Time. Late applications will not be considered.

All applications in response to this RFA shall consist of a technical proposal and a budget proposal. The technical proposal must not be longer than 15 pages in length. Pages submitted in excess of 15 pages will not be reviewed. The cost proposal (budget) shall be submitted as a separate file from the technical proposal. The required format for applications is included as Annex 2 - Full Application Form and Annex 2A – Budget Form.

Section 5 – Application Review Information

Applications will be evaluated in accordance with the criteria set forth below. The criteria have been tailored to the requirements of this RFA. Applications should note that these criteria serve to: (a) identify the significant matters which Applicants should address in their applications; and (b) set the standard against which all applications will be evaluated.
To the extent necessary, the Project may request clarification and supplemental materials from Applicants whose applications have a reasonable chance of being selected for Award. The entry into discussion is to be viewed as part of the evaluation process and shall not be deemed as indicative of a decision or commitment upon the part of the Project to make an award to the Applicants with whom discussions are being held.
Applications will be evaluated by the Grants Selection Committee on the basis of 100 possible points. The weighting of various sections will be as follows:

Category

Maximum Points (100 Total)

Understanding of Key Issues
Grant Activity Goals, Objectives and Methodology
Sustainability of Outcomes / Expected Results
Proposed Tasks and Activities
Staffing/Management Plan
Relevant Past Experience and Performance
Cost Realism
Total Possible Points

10
10
20
10
15
15
20
100

  • Understanding of the Key Issues (10 points): Does the applicant demonstrate a clear understanding of the problems/key issues that the proposed grant activity will address?
  • Grant Activity Goals, Objectives and Methodology (10 points): Is the overall goal of the proposed grant activity clearly stated and achievable? Does the applicant list specific objectives that will contribute to achieving the grant’s goal? Is the proposed methodology suitable for this kind of assessment?
  • Sustainability of Outcomes / Expected Results (20 points): Do the expected results of the proposed grant activities relate to the key issues and overall grant objective? Are anticipated results directly linked to a specific objective? Are the results verifiable?
  • Proposed Tasks and Activities (10 points): Does the applicant propose specific activities that are logical, realistic, and relevant to the grant activity’s goal?
  • Staffing/Management Plan (15 points): Does the proposed staffing/management plan reflect the personnel/management needs of the grant activity? Does the applicant propose personnel with experience and skills necessary to successfully implement the proposed activities?
  • Past Experience (15 points): Does the organization have relevant past experience successfully implementing similar activities?
  • Cost Realism (20 points): Is the proposed budget realistic, well-though out, and in-line with the proposed activities? Are the proposed costs reasonable, allowable and allocable to the grant? Is the grantee contributing cost-share or providing in-kind support?

The selection of the Applicant for award will be made by the Project’s Grant Selection Committee. Prior to the award of any resultant grant agreement, the Project must obtain prior approval from USAID.

Section 6 – Award and Administration Information

Before the applications’ specified expiration date, successful applicant(s) will receive written notice from the Grants Manager informing the applicant(s) that the Project either intends to award a grant to the applicant without negotiation, or that the Project intends to engage the applicant(s) in further negotiations with respect to a potential grant award. Negotiations conducted after the receipt of an application do not constitute an obligation on the part of the Project to award a grant. Unsuccessful applicants will be notified in writing by the Grants Manager.
Any resultant award will be subject to the terms and conditions of the Prime Contract for the USAID Business Enabling Project (for US organizations: 22 CFR 226, OMB Circulars, and the Standard Provisions for U.S. Non-governmental Recipients; for non-US organizations: Standard Provisions for Non-U.S. Non-governmental Recipients).

Section 7: Annexes

Annex 1: Certifications
Annex 2: Full Grant Application Form and Budget Form

 

 

 







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