progress reports) completion.

Page 1 of 8 

Annex 1 – LOGICAL FRAMEWORK MATRIX

Logframe Planning Matrix for Project

Programme name & number

Support for Political and

Socio-Economic Reforms (STR2)

ENPI/2007/018-881

TAX: COMPLIANCE AND RISK MANAGEMENT

MINISTRY OF FINANCE (MOF)

Twinning Number

LB09/AA/FI/06

Total budget: €1,100,000

ENPI budget: €1,100,000

Overall Objective

Benchmarks

Source of Information

To improve fiscal balance by increasing

revenue collection.

Š

Increase in revenue collection

_{by 4% two years after project}

completion.

Š

Government reports (Paris III

progress reports)

Reports prepared by

Š

the

Lebanese Tax Administration

Reports prepared by

Š

international organizations

(IMF, WB, EU, …)

Project Purpose

Benchmarks

Source of Information

Assumptions

To improve tax col

better risk

management, compliance and

lection efficiency through

auditing techniques.

Š

Generated re

improved by

4% two years

venues are

after project completion

Increase in voluntary

compliance by 2% two ye

Š

ars

after project completion

Risk based approach audit

selection system is fully i

Š

n

use in major tax offices

(Large Taxpayers Office

(LTO), Beirut, Mount

Lebanon) two years after

project completion

Compliance, risk managem

and auditing techniqu

Š

ent

es

standardized across major tax

offices (Large Taxpayers

Office (LTO), Beirut, Mount

Š

MOF annual statistics report

Š

MOF annual Audit Plan

Š

MOF Performance repor

risk based Audit progra

ts on

ms

Š

MOF departmental Quality

Assurance reports

Š

Allocation of

human and fi

needed

nancial

resources to manage

the operations and

ensure sustainability

Tax payers respond

positively to

Š

improvements in

audit mechanism

Maintaining tax

reform policy by t

Š

he

Government

Political stability

Š

Page 2 of 8 

Lebanon) two years after

project completion

Results

Benchmarks

Source of Information

Assumptions

A - Risk Management

chniques developed

A.2 -

dit programs developed

A.3 -

eveloped and

gement

alysis

A.

ssess and

A.

l

A.

grams are

A.

ques are

d

A.

nd

et

A -

ly one

0)

ce

ts by

s

A1

t plan

lan

n

A3

and

and

A.1 - Risk Analysis Te

and adopted

Risk based au

and implemented

Audit Techniques d

adopted

A - Risk Mana

A.1 - Necessary risk an

and audit techniques are

developed and adopted by

major tax offices (Large

Taxpayers Office (LTO),

Beirut, Mount Lebanon)

two years after project

completion

1 - Ability to a

prioritize risk elements

acquired and utilized

1 & A.2 - Risk grids are

built and used in annua

audit plans

2 - Audit pro

implemented

3 - Audit techni

improved, enhanced an

implemented in major tax

offices (Large Taxpayers

Office (LTO), Beirut, Mount

Lebanon) two years after

project completion

3 - New procedures a

reporting systems are s

and in place

Approximate

hundred twenty (12

auditors trained on the

state of the art complian

and auditing techniques

A - Risk Management

A - MOF annual report

A - External assessmen

international organization

(IMF, WB, EU) through

periodical evaluation and

progress reports

- MOF annual audi

A1 & A2 - Risk based audit p

A1 & A3 - MOF internal reports

(national and regional)

quantifying revenues

generated from audit

A2 - Statistics generated from

MOF database for evaluatio

and follow-up purposes

- Risk Management

Techniques’ manuals

templates

A - Project progress reports

A - Project training material

training evaluation reports

Š

Skilled and trained

staff can be retained

The design of the

Š

Risk based Audit

programs is

implemented,

maintained and

operationally kept up

to date

Proper u

Š

pdate and

adjustments of Risk

Grids on regular

basis

Page 3 of 8 

B - Compliance Management

nsive

and

B.2 - I

n

B - C

nt

B.1 - Multi-criteria, comprehe

analytical database designed

adopted

ntegrated management informatio

system designed and adopted

B.3 - Strategic and operational KPIs

developed and adopted

ompliance manageme

B.1 - Database designed and

ready to be developed

B.2 - MIS designed and ready

to be developed

B.3 - KPIs are defined and

used

B - Compliance management

B - Project progress reports and

deliverables

Activities

Benchmarks

Source of Information

Assumptions

.1.1.1: - Major economic

sectors based on

is

economic

A.1.1.2:

major

A.1.1.3:

& identified

-s

g

.

Manual and Profile

.1.1.2: Selection Criteria for

major economic

.1.1.3: New Risk Grid and

Modified Risk Grids

A

- Risk Management Component

A.

1

R

isk Analysis

A.1.1

Risk An

A.1.1.1

D

alysis Techniques

evelop Profiling

Techniques

A.1.1.2

Identify, assess and

prioritize the risks

A.1.1.3

Building Risk Grids

A

relevant indicators are

determined

- Training on profiling

techniques

conducted

- Profile template for

selected

sectors are built

- Risk elements for

selected

economic sectors are

determined and

Selection Criteria are

identified

Based on the profile

templates

risk elements:

Risk

grids

are

developed

Š

Project progress report

Š

Training material and tr

ainin

evaluation reports

1

A .1.1: Profiling Techniques

Template for selected

economic sectors

A

sectors

A

and Combined Risk

grid

Š

The methods

developed are

applied in daily

operations

Secondary

Š

databases

are made available;

e.g. Land Registry,

Customs, …

Š

MOF will automate

the tax payers

profiles and risk

grids

Page 4 of 8 

A.1.1.4

Enhance the research

and intelligence function

-

k grids are

ly

.1.1.4: Research Analysis

Current ris

updated & modified

- Combined risk grid is

developed

A.1.1.4: Training is conducted

for:

- Gathering & sorting

information

- Extracting info from

Profiles

- Introducing and

Implementing

economic tax ana sis

- Using patterns and

trends to shape audit

strategy

A

Procedures Manual

A.1.2

Audit Programming Techniques

A.1.2.1

Develop audit program

s

A.1.2.2

Monitor, review and

evaluate audit programs

A.1.2.1:General and Specific

et

A.1.2.2:

templates

rting

wed

audit programs are s

using Selection Criteria

& risk grids

- Reporting

are provided

- Existing repo

schedules are revie

ed

- Finalized reporting

schedules are design

A.1.2.1: Template of Audit

.1.2.2: Reporting Templates

Programs

A

and Revised reporting

schedules

A.2

Audit

A.2.1

Audit Techniques

A.2.1.1

Introduce Desk Audit

methodologies

A.2.1.2

Introduce Refund Audit

methodologies

Training material

A.2.1.2:

.2.1.1: Procedures of Desk

&

2.1.2: Procedures of Refund

A.2.1.1:

-and content are set

- Training on Desk

audit techniques is

conducted

- Training material

and content are set

- Training on Refund

audit techniques is

A

Audit methodologies

techniques

A.

Audit methodologies &

techniques

Page 5 of 8 

A.2.1.3:

d

A.2.1.4:

l

t

A.2.1.5:

l

A.2.1.6:

A.2.1.7:

l

1.2.3: Procedures of Criminal

Audit methodologies &

.1.2.4: Procedures of Indirect

Audit methods and

A.1.2.5:

of

Business Valuations

s and

.1.2.6: Procedures of Quality

Assurance methods

.1.2.7: Guideline of Audit

Communications &

A.2.1.3

Introduce Criminal Audit

methodologies

A.2.1.4

Introduce different audit

methodologies and

sampling methods

A.2.1.5

Introduce Business

Valuations Audit

methodologies

A.2.1.6

Introduce Quality

assurance

methodologies

A.2.1.7

Introduce Audit

Communications &

Conflict Resolutions

Techniques

conducted

- Training material

and content are set

- Training on

kills an

investigative s

building a criminal

audit case is

conducted

- Training materia

and content are set

- Training on indirec

methods and sampling

techniques is

conducted

- Training materia

and content are set

- Training on

siness

identifying bu

valuations cases and

methodologies to

determine Fair Market

Value used in audit is

conducted

- Training material

and content are set

- Training on Quality

assurance

methodologies is

conducted

- Training materia

and content are set

- Training on

n and

communicatio

conflict resolutions

with taxpayers is

conducted

A.

techniques

A

Sampling

methodologies

techniques

Procedures

audit method

Sampling

methodologies

techniques

A

A

Conflict Resolutions

Techniques

A.2.2

On-site Audit Training

A.2.2.1

Provide training on

specialized industries

A.2.2.1:

d industries A.2.2.1: Audit guidelines for

s

- Specialize

Page 6 of 8 

ial and

es is

A.2.2.2:

A.2.2.3:

.2.2.2: Audit guidelines for

on

.2.2.3: Audit guidelines for

A.2.2.2

Provide training for

specialized topics in

international taxation

A.2.2.3

Provide training for

electronic records

auditing

- Training mater

content are set

- Training on audit

techniques for

specialized industri

conducted

- international taxation

topics are identified

- Training material and

content are set

- Training on topics in

international taxation

is conducted

Training on Computer

Assisted Audited

Techniques is

conducted

A

International Taxati

A

Electronic Audit

Technique

•

CAAT software

made available by

MS Administration

for demonstration

purposes during

the training

A.3

Study Tours

A.3.1

High-lev

el group

A.3.2

Risk Analysis groups

A.3.1: - Study Tour program is

set

global picture of risk

es

A.3.2:

ram is

pliance department

all

A.3.1: Study tour report

.3.2: Study tour report

- Study Tour covering

the

management techniqu

with the functioning of

the departments is

completed

- Study Tour prog

set

- Study Tour of

Com

employees covering

the functions related to

risk analysis is

completed

Page 7 of 8 

A.3.3:

ogram is

n

is

.3.3: Study tour report

A.3.3

Audit groups

- Study Tour pr

_set

- Study Tour of Audit

department employees

covering the applicatio

of the learned modules

completed

A

B

- Compliance Management Component

B.1

Data Base Building and Linkage

B.1.1

Establish links between

different systems

.1.1: - List of pertinent

information sources is

cal

igned

.2.1: - Business rules are

identified

tion

s and

.1.1: List of pertinent

information sources and

.2.1: Guidelines for MIS

reporting system and

.3.1: Guidelines for

Performance

nd

KPIs and

B.2

IS

B.2.1

M

Design an integrated

Management Information

Reporting System

B.3

PIs

B.3.1

K

D

evelop key indicators

B

identified

- Multi-criteria,

comprehensive analyti

database is des

B

- Templates for MIS

reports are prepared

- Integrated

management informa

system is designed

B.3.1: - Strategic and

operational KPIs are

developed

- Training on

measurement

methodologie

performance

management is

conducted

B

Guidelines

B

Templates for MIS

reports

B

Management a

up and List of

measurement

methodologies

•

MOF will develop

the designed

Compliance

Management

Information

System

Page 8 of 8 

.4.1: - Study Tour program is

ring the

B.4.2:

ring the

follow

.4.1: Study tour report

.4.2: Study tour report

B.4

Stud

ours

B.4.1

ata m

techniq

y T

D

ining and linkages

ues

B.4.2

Performance management and

follow-up

B

set

- Study Tour of

Employees cove

actual functioning of

learned components is

completed

- Study Tour program is

set

- Study Tour of

Employees cove

handling of actual

performance

management and

up techniques is

completed

B

B