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Developments @ DAI
Developments blog, domestic resource mobilization takes root in el salvador ... and beyond.
An encouraging trend in development is gaining speed: more countries want to do more to fund their own development, and donors are on board. At the July 2015 Third International Conference on Financing for Development in Addis Ababa, Ethiopia, attended by more than 110 heads of state, ministers, and officials from 38 countries, donors pledged a doubling of assistance by 2020 for programs to increase domestic resource mobilization.
When a “poor” country improves its financial health and thus its ability to fund public services such as education and health care, it is more than just a victory for dollars and cents. Stepping up domestic resource mobilization, the Addis attendees agreed, “is core to ensuring solid financing of the Post-2015 Development Agenda. [While] domestic public resources are a more stable and sustainable source of income, they also strengthen a legitimate relationship between citizens and the state and foster good governance.”
We know from experience in El Salvador that governments can increase their cash flow, provide more essential services, and do a better job of managing domestic revenues and expenditures. But such turnarounds demand three key ingredients: time, commitment, and openness.
For more than a decade, the U.S. Agency for International Development (USAID)—in a series of projects implemented by DAI—has helped the government of El Salvador to greatly increase tax revenues. This has enabled the country to invest more in public services such as health care while promoting transparency, accountability, and efficiency. In doing so, we have demonstrated that a comprehensive and long-term fiscal reform approach can greatly assist a country in strengthening its financial standing.
Raising Revenues, Not Tax Rates
In 2005, DAI was awarded the Tax Policy and Administration Reform (TPAR) project, a five-year USAID program to modernize and improve El Salvador’s tax administration. TPAR designed and implemented a system that increased tax collections for the government without increasing tax rates while minimizing tax evasion and avoidance.
TPAR made significant strides in helping El Salvador advance its fiscal reform agenda. Importantly, it enabled the government to mobilize on average more than $300 million annually in additional tax revenue from 2004 to 2011, without raising tax rates. TPAR also:
- Increased the tax-to-gross domestic product ratio from 12.2 percent in 2004 to 14.1 percent in 2007, strengthening El Salvador’s ability to meet its financial obligations.
- Supported formation of new offices for Criminal Investigation, Fiscal Compliance, and Excise Tax, which helped secure nearly $38 million in additional tax revenues.
- Developed and launched a modernized IT infrastructure at the Dirección General de Impuestos Internos (DGII), which served as the foundation for improved operations and greater efficiency; we then assisted the DGII in implementing the fiscal reform agenda of 2009, which generated an additional $66 million in tax revenue.
Again, El Salvador accomplished these revenue gains not by raising tax rates but by improving policies and systems, training people, and being forthright with its taxpayers. The new Taxpayer Assistance Call Center provides orientation and legal guidance to taxpayers regarding their tax obligations. The Taxpayer Advocate Unit was instituted to protect taxpayers’ rights and increase accountability in tax administration. We increased the transparency, efficiency, and fairness of tax audits by developing a Case Selection and Management System (CSMS) that automates the audit selection process.
But even after five years, the job—the process —was far from over.
Long-Term Process, Sustained Results
In 2010, DAI was awarded the Fiscal Policy and Expenditure Management Program (FPEMP), a 68-month project funded by USAID. Building on the foundation laid by TPAR, USAID/DAI and the El Salvador government deepened our work in tax policy and administration, launched reforms in public expenditure management, and further energized dialogue between the government, private sector, and civil society. We have made notable advances in assisting the government to improve its financial management systems and align with international best practices. To name a few results, we:
- In coordination with the U.S. Department of Treasury, supported implementation of a Treasury Single Account, which consolidated 1,600 government bank accounts.
- Reviewed and updated 21,523 taxpayer records in the national taxpayer registry.
- Further developed the Case Selection Management System (CSMS II), which has become a powerful tool for the DGII functions of tax enforcement, tax collection, tax audit, and taxpayer outreach. Advanced data mining through CSMS II helped the government collect more than $120 million in additional resources in just eight months (0.5 percent of GDP).
The FPEMP team has also improved El Salvador’s fiscal quality , in part by revamping the government’s Chart of Accounts in compliance with International Public Sector Accounting Standards (IPSAS) and extensively training government staff on the new systems.
These tangible financial victories for El Salvador have been won because the country is doing the business of government better, and this discipline has begun to pay off for citizens as the government is gradually increasing expenditures and services . For example, by 2013, El Salvador had expanded access to basic health services to 1.9 million Salvadorans (30 percent of the population) from the poorest and rural municipalities.
As El Salvador continues to spend more money on services, it is determined to spend wisely. The Sistema de Administración Financiera Integrado (SAFI II) public expenditure management system that FPEMP helped improve will be supported by a new Public Procurement Ombudsman to guarantee transparency and adherence to the law. We are assisting in finalizing the government’s Fiscal Transparency Portal to include detailed data on national and municipal public finances, and helping the Ministry of Finance develop multiyear, results-oriented budgeting.
The FPEMP team also developed COMPRASAL II, the government’s next-generation e-procurement system, including the necessary software. Once completed, COMPRASAL II will be a fully transactional system that supports a unified registry of government vendors and facilitates validation of their information. Additionally, COMPRASAL II will allow procurement to be conducted online and linked to budget programming.
TPAR and FPEMP drew on a deep understanding of country context, in addition to a well developed network of relationships with counterparts in the Government of El Salvador and the region, USAID, and other international donors. Both TPAR and FPEMP implemented a suite of interventions that address interrelated focal areas over an extended period of time, which was necessary to advance fiscal and expenditure management substantively and sustainably.
This ongoing teamwork has enabled the El Salvador government to implement a wide range of initiatives to increase capacity, accountability, and transparency in public financial management, while also contributing to greater citizen confidence in public sector institutions. In line with the aspirations of the Addis Ababa conference, we believe other countries can produce similar results through comprehensive and long-term fiscal reform.
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This support helped El Salvador to reap an additional $1.03 billion (or 2.5 percent of GDP) between 2017 and 2021. To ensure that the increase in revenue mobilization has the best possible impact on public value creation, El Salvador's government, with the support of USAID, modernized its PFM system and strengthened its revenue collection.
The result is a system that struggles to offer all Salvadoran youth positive pathways to meaningful social inclusion offered by economic stability and rewarding work. Through Puentes para el Empleo, DAI supported the U.S. Agency for International Development in El Salvador to link young people—including women and vulnerable populations—to ...
Sponsoring USAID office: USAID/El Salvador Economic Growth Office Contract Number: AID-519-C-17-00002 COR: Martin Schulz ... USAID and DAI Global, LLC (referred to as DAI) signed the Project's contract on April 27, 2017. The Project is for five years and concludes on April 26, 2022.
USAID/El Salvador is teaching future taxpayers about the importance of compliance through an interactive exhibit in San Salvador. ... DAI is a global development company working on the frontlines of international development consulting. We are committed to shaping a more livable world.
El Salvador Domestic Resource Mobilization Project First Year Work Plan May 2017 - April 2018 ... 2017 through April 30, 2018. USAID and DAI Global, LLC (referred to as DAI) signed the contract on April 27, 2017. The Project is for five years and concludes on April 26, 2022.
She is currently the Chief of Party (COP) of the USAID "Skills for Employment/Habilidades para el Empleo" project in El Salvador, implemented by DAI Global LLC. She provides strategic guidance and overall management to the project, and oversees a sizable local team to ensure that implementation moves forward in line with project goals and ...
The United States Agency for International Development (USAID) signed a contract with DAI Global, LLC on April 27, 2017 to continue improving public financial management practices, increase domestic revenue mobilization and generate additional revenue for the public sector in El Salvador.
In 2005, DAI was awarded the Tax Policy and Administration Reform (TPAR) project, a five-year USAID program to modernize and improve El Salvador's tax administration. TPAR designed and implemented a system that increased tax collections for the government without increasing tax rates while minimizing tax evasion and avoidance.
MEL Director | USAID Skills for Employment El Salvador | DAI Global LLC DAI Jul 2023 - Present 5 months. San Salvador, El Salvador Especialista M&E en PREFEM II LuxDev Sep 2021 - Jun 2023 1 year 10 months. San Salvador, El Salvador Encargado M&E en proyecto ICRIME ...
DAI Global, LLC (DAI) DAI was founded in 1970 by three graduates of Harvard University's Kennedy School of Government intent on providing a more dynamic and effective brand of development assistance. This entrepreneurial approach would look beyond traditional philanthropy to embrace the virtues of the private sector, and build a company that ...
Through Puentes para el Empleo, DAI supported the U.S. Agency for International Development in El Salvador to link young people—including women and vulnerable populations—to basic social resources of work, knowledge, security, and social capital to foster inclusion through employment opportunities. Read More
Tuvalu. DAI Global LLC (DAI) has worked in more than 150 countries, implementing over 2,000 projects and delivering results across the spectrum of international development contexts, from stable societies and high-growth economies to challenging environments racked by political or military conflict. | Thu, 11/23/2017.
EL SALVADOR DOMESTIC RESOURCE MOBILIZATION PROJECT MONITORING, EVALUATION, AND LEARNING (MEL) PLAN CONTRACT No.: AID-519 C 17 00002 August 2017 This publication was produced for review by the United States Agency for International Development. It was prepared by DAI Global, LLC.
September 4, 2017 ·. DAI Global LLC, una empresa de desarrollo global, solicita contratar expertos (as), profesionales altamente calificados (as) y comprometidos (as) con el desarrollo regional, para trabajar en diversas areas técnicas y administrativas del Proyecto de Nexos Locales financiado por USAID. Este proyecto de cinco años está ...
Summary Posted 10/13/23, 5:03 PM This definitive contract between the US Agency for International Development El Salvador (USAID - OM) and DAI Global LLC aims to improve public financial management practices in El Salvador to increase domestic resource mobilization and support the efforts of the Government of El Salvador (GOES) to generate additional revenue.
Summary Posted 1/22/24, 11:55 AM. DAI Global LLC, doing business as DAI, is an international development company that provides technical assistance and services to support long-term economic growth and U.S. foreign policy goals in developing countries. Through prime and subcontract awards, DAI Global LLC has provided a wide range of goods and ...
responsabilidad de DAI Global, LLC y no refleja necesariamente los puntos de vista de USAID o del Gobierno de Estados Unidos. PCM Página 2 PROYECTO DE USAID PARA LA ... Oficina Responsable de USAID: Crecimiento Económico USAID/El Salvador Número de Contrato: AID-519-C-17-00002 Contratista: DAI Global, LLC Autor: Patricia Cerra
Corporation. USAID Prime Partner. DAI Global, LLC. Bethesda, United States of America. Operates in. DAI's mission is to make a lasting difference in the world by helping people
Transforming Izmir. Türkiye's port city is becoming a clean energy hub. DAI works on the frontlines of global development. Transforming ideas into action—action into impact. We are committed to shaping a more livable world. Supply Chain Solutions. inefficient markets ineffective governance instability.