Benin - Second Phase of the Public Resource Management for Jobs and Growth Program for Results

Overview & Synopsis

The development objective of the Benin Public Resource Management for Jobs and Growth for Benin is to increase domestic revenue and improve efficiency in public expenditure management. The operation, delivered through a Program for Results with a small Investment Project Financing component, focuses on two areas: Domestic Revenue Mobilization (DRM) and Public Financial Management (PFM). On DRM, the project supports simplifying and formalizing informal-sector taxation, strengthening the integrity of the taxpayer registry by linking the Unique Taxpayer Identification Number to the national ID, rationalizing tax expenditures and broadening the Value Added Tax (VAT) base including for digital economy transactions, deploying fiscal incidence analysis to inform equitable policy design, enhancing compliance risk management using a business intelligence platform, instituting performance management in the tax administration, improving customs risk-based selectivity for inspections, and recovering customs arrears. On PFM, the project supports rules-based and timely intergovernmental fiscal transfers to communes, mandatory cost benefit or feasibility appraisal of new domestically financed public investment with spatial and climate lenses, stronger State Owned Enterprise (SOE) oversight through timely publication of financial performance and fiscal risk reports and better dividend and cross debt management, and more open and competitive public procurement aligned with budget and investment planning and complemented by professionalization and risk based audit. The accompanying technical assistance finances enablers such as strengthening customs compliance risk management, operationalizing procurement professionalization, developing consolidated public sector financial reporting, bolstering independent verification and audits, and reinforcing grievance mechanisms including a monitored channel for women cross border traders and gender responsive human resource and service delivery practices in revenue administrations. Expected results include an increase in the tax to GDP ratio, a higher number of newly formalized enterprises filing non nil returns, expanded use of open competitive tendering, improved coverage and quality of project appraisal, more predictable and equitable local transfers, reductions in customs arrears, and enhanced transparency of SOE fiscal risks, thereby supporting debt sustainability indirectly. The project has no physical works and emphasizes system performance, transparency, digitalization, and evidence based reforms to translate revenue gains into credible, efficient spending that supports jobs and growth while protecting vulnerable groups through informed tax and transfer design.