331_National Consultant to develop a handbook on taxation and reporting for MSMEs from Luhansk, Donetsk and Zaporizhzhia oblasts

Background

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NB: Please note that online/application system does not recognise Russian/Ukrainian language, information you provide in on-line application questionnaire  must be presented in English. All requested documents should be combined/merged (compressed if necessary) and uploaded into the application system by 1 document/attachment only.

 

1. BACKGROUND / PROJECT DESCRIPTION

The ongoing conflict in eastern Ukraine has had a direct and highly negative impact on economy, social cohesion, resilience, livelihoods, community security, and the rule of law. Recognizing the need to urgently address reconstruction, economic recovery and peacebuilding needs in areas affected both directly and indirectly by the conflict, in late 2014 the Government of Ukraine requested technical assistance and financial support from the international community to assess priority recovery needs. In late 2014, the United Nations (UN), the World Bank (WB) and the European Union (EU) conducted a Recovery and Peacebuilding Assessment, which was endorsed by the Cabinet of Ministers in mid-2015.

The United Nations Development Programme (UNDP) has been active and present in eastern Ukraine for the past decade, prior to the conflict, with a focus on community development, civil society development, and environmental protection. Work on addressing the specific conflict-related development challenges discussed above built on this earlier engagement, established partnerships, and started in 2015 through the United Nations Recovery and Peacebuilding Programme (UN RPP). The UN RPP is a multi-donor funded framework programme formulated and led by the UNDP in collaboration with the Government of Ukraine and in cooperation with a number of partnering UN agencies (UN Women, FAO, UNFPA).

The RPP was designed to respond to, and mitigate, the causes and effects of the conflict. It is based on findings of the Recovery and Peacebuilding Assessment (RPA) and is aligned to the State Target Programme for Recovery as well as to the two oblast development strategies up to 2020. It takes into account the opportunities that have arisen from the Minsk Protocol of September 2014 and the renewal of its cease-fire provisions (the latest cease-fire having been agreed in March 2018) and is also fully adjusted to the humanitarian-development nexus. It is an integral component of the UNDP Country Programme and is therefore fully aligned with the United Nations Partnership Framework (UNPF). It is closely interlinked with the Democratic Governance and Reform Programme, operating nationally and in all of Ukraine’s regions, and is consistent with the SDGs.

The Programme’s interventions are grouped under the following key Programme components, which reflect the region’s priority needs:

Component 1: Economic Recovery and Restoration of Critical Infrastructure

Component 2: Local Governance and Decentralization Reform

Component 3: Community Security and Social Cohesion.

The Programme, which operates on the basis of a pooled funding arrangement, follows a multi-sectoral programme-based approach and is implemented using an area-based methodology. It is a unifying interventions framework for 13 projects funded by 13 international partners and is worth over USD 80 million (2019-2022).

In October 2018, four UN agencies (UNDP, UN Women, FAO and the UNFPA) have countersigned a new joint project document, funded by the EU. The overall objective of the project is to restore effective governance, support economic recovery and promote reconciliation in the crisis-affected communities of Donetsk, Luhansk and Zaporizhzhia oblasts in Ukraine, thereby enhancing the credibility and legitimacy of local governments in the government-controlled areas of the regions. It will contribute to peace build and prevent further escalation of conflict in Ukraine through effective and accountable decentralization, gender-responsive recovery planning and equal access to services, as well as enhanced economic recovery and development.

This endeavour will be achieved through the pursuit of the following specific objectives:

1. Enhancing local capacity for gender-responsive decentralization and administrative reforms to improve governance, local development and the delivery of services.
2. Stimulating employment and economic growth by providing assistance to Micro, Small and Medium Enterprise (MSME) development through demand-driven business development services and professional skills training.
3. Enhancing social cohesion and reconciliation through promotion of civic initiatives.
4. Supporting sector reforms and structural adjustments in health, education and critical public infrastructure to mitigate direct impacts of the conflict and enhance the capacity of governmental authorities for national the coordination of actions to cope with emergencies arising from the conflict zone.
5. Supporting the implementation of the European Investment Bank’s Early Recovery Programme.

 

Under objective 2, the Programme aims to foster economic revitalization in eastern Ukraine and, specifically, stimulate employment and economic growth by providing assistance to Micro, Small and Medium Enterprises (MSMEs) development. The Programme supports demand-driven business development services, professional business skills training and strengthening institutional and educational infrastructure for the effective functioning of regional economy. Due to the conflict, bank lending, leasing and other credit (including trade credit) have been limited in the region. Thus, business owners have difficultly to access finance and connect to markets in the rest of Ukraine and beyond and expand their businesses. Inclusive economic growth needs to be advanced through support for MSMEs and trade development in the priority sectors of the prioritized value chains in the region. Such sectors have already been identified in most areas of Luhansk and Donetsk (Government-Controlled Areas, hereinafter - GCAs) oblasts as well as in the areas of Zaporizhzhia oblasts along the Azov sea coastline (Berdiansk, Prymorsk, Pryazovia, Orikhiv, Guliaipole, Yakymivka and Bilmak rayons, the towns of Melitopol and Tokmak, and Zaporizhzhia city) and now those identified value chains need development strategies for further interventions.

The ongoing COVID-19 crisis is challenging people, households, and businesses in unprecedented ways. The pandemic is limiting economic and social interactions, lead to decreased demand, loss of income-generation opportunities, and limit the MSMEs in access to new knowledge and exchange of information. The quality knowledge products are one of the main sources for economic growth, however, due to the current market situation, the MSMEs have lack of qualitative knowledge materials on business topics.

To support the economic revitalization and implementation of planned interventions, UNDP is seeking a National consultant to develop a handbook on taxation and reporting for MSMEs from Luhansk, Donetsk and Zaporizhzhia oblasts (hereinafter – the Consultant) in government-controlled areas of Luhansk, Donetsk and Zaporizhzhia oblasts (hereinafter - the targeted regions).

Duties and Responsibilities

2. MAIN OBJECTIVES OF THE ASSIGNMENT

The main objective of the assignment is to develop the handbook on taxation and reporting for MSMEs from non-agricultural and agricultural value chains operating on the territories of targeted regions.

The target value chains are listed below:

1. Industry and Engineering Services
2. Textiles and Clothing
3. Hospitality
4. Ceramics
5. Food Processing
6. Dairy and Beef
7. Poultry and Eggs
8. Grain and Oilseeds
9. Fruits and Vegetables

 

3. DESCRIPTION OF RESPONSIBILITIES / SCOPE OF WORK

 

Under the direct supervision of Programme Coordinator, Economic Recovery and Restoration of Critical Infrastructure, the Consultant will be responsible for the implementation of the following tasks:

Initial stage (Output 1):

• Prepare a detailed work plan and methodology to develop the handbook on taxation and reporting for MSMEs from non-agricultural and agricultural value chains operating on the territories of targeted regions and agree with the direct supervisor;
• Review the Program’s work documents (e.g. Assessment of business environment and market conditions resulted from COVID-19 pandemic in Donetsk, Luhansk, and Zaporizhzhia oblasts, Market analysis of prioritized value chains, including a detailed mapping of market stakeholders in Luhansk, Donetsk and Zaporizhzhia oblasts, etc.) and analyze the market trends, constraints of each targeted value chain and use the gathered information to develop the required handbook on taxation and reporting issues;
• Develop the Inception report on the data collected. The document should follow the next requirements: single spacing, Noto Sans, size 11, Ukrainian and English languages.

Handbook development (Output 2)

Develop handbook on taxation and reporting for MSMEs from non-agricultural and agricultural value chains operating on the territories of targeted regions. The document to be produced should be attuned to the local conditions, needs, and context of Donetsk, Luhansk, and Zaporizhzhia oblasts.

The handbook should follow the next structure:

Taxation:

• Make an overview of the Ukrainian tax system and tax legislation, provide the information on tax registration forms for MSMEs from Donetsk, Luhansk, and Zaporizhzhia oblasts;

• Review the tax system for legal entities:

1. peculiarities of the single and general taxation systems, transition conditions, restrictions, determination of the average number of employees, determination of the amount of annual income, compliance with the conditions for payment of taxes and mandatory payments, deregistration as a VAT payer;
2. the procedure for the transition to a single tax, rates of the single tax and the procedure for its payment, tax at the rate of 5% and 10%, single tax at the rate of 3% and 7%, change in the rate, the base of taxation with a single tax, etc.;
3. form of payments for products (works, services);
4. unified tax and other taxes, fees and contributions: VAT, land tax, unified social tax, contribution to the Social Security Fund for the disabled, taxes and fees, etc.
5. features of the transition to a general taxation system: VAT registration, transitional fixed assets, transitional returnable financial assistance, transient sales and purchase transactions, VAT during transitional transactions;
6. liability: administrative liability, criminal liability for tax evasion.

• Review the tax system for private entrepreneurs:

1. peculiarities of the single, simplified and general taxation systems;
2. conditions and procedure for the transition to the payment of a single tax: criteria for the transition, groups, the procedure for transition, etc.;
3. payment of the single tax: the rates of the single tax, the transition from one group to another, the timing of the payment, etc.;
4. features of the calculation and payment of certain taxes (contributions, fees, VAT, registration, deregistration, refunds, land tax, personal income tax, Unified social tax, etc.)
5. employees, legislative regulation of labor relations, the procedure for concluding an employment contract, features of keeping workbooks, rules for calculating and paying salaries to employees, employment of disabled people;
6. the procedure for settlements with consumers, cash payment terminals, cash discipline;
7. transitional operations: transition to a simplified taxation system, transition to a general taxation system, special cases;
8. liability: administrative liability, criminal liability for tax evasion, etc.

• Describe the procedure of the tax registration in the Tax Service, present the list and examples of the documents required for the tax registration; explain the specificity of data entering;
• Make an overview of the subsidized loan programs, guarantees, government grants, etc. targeted at MSMEs;
• Other relevant topics can be proposed by the Consultant.

Reporting:

• Describe the reporting for the legal entities and private entrepreneurs: calculation of the tax payments, declaration, and other mandatory reporting;
• Tax calculation of the amounts of income accrued (paid) in favor of taxpayers, and the amounts of tax withheld from them;
• Report on the number of tax benefits received;
• Report on the amounts of accrued wages;
• Job vacancy report;
• Accounting for small businesses;
• General issues of the organization of accounting, forms of accounting, financial reporting;
• Accounting books of income and expenses;
• Make an overview of the administrative aspects of the MSMEs;
• Other relevant topics can be proposed by the Consultant.

The document requirements: up to 100 pages, single spacing, Noto Sans font, size 11, pdf format, Ukrainian language.

Final stage (Output 3):

• Develop a Final report that should include the activities within the assignment, scope of work conducted, results achieved. The Final report should have a reference to the developed Handbook. The requirements to the document: up to 20 pages, single spacing, Noto Sans font, size 11, Ukrainian and English languages;
• Prepare the Executive Summary/Brief of the developed handbook. Requirement to the document: Ukrainian and English languages, up to 3 pages, single spacing, Noto Sans font, size 11, pdf format,
• Conduct at least one half-day presentation of results in one of the targeted regions (mode of event and location is to be determined), facilitate discussions on the results achieved and present the developed recommendations. Costs of conference services related to the arrangement of presentations will be covered by UN RPP.

 

4. DELIVERABLES AND IMPLEMENTATION SCHEDULE

#	Deliverables	Deadline
1	A detailed work plan and methodology to develop the handbook on taxation and reporting for MSMEs from non-agricultural and agricultural value chains are designed and agreed with UN RPP. Inception report is developed and approved by UN RPP.	Within 30 calendar days after the start of the assignment
2	The handbook on taxation and reporting for MSMEs from non-agricultural and agricultural value chains is developed and approved by UN RPP.   Final report is developed and approved by UN RPP.	Within 60 calendar days after the start of the assignment
3	Final report and Executive Summary/Brief on the developed handbook have been presented in the determined by UN RPP location.	Within 90 calendar days after the start of the assignment

 

 

5. Proposed Payment Schedule

UN RPP will pay the negotiated amount in 3 tranches as per delivery of the outputs outlined above.  

The payments will be paid upon the full completion and acceptance of contractual obligations whereupon the Programme Coordinator signs the certification of acceptance.

20% of total contract amount upon completion of Deliverable 1

40 % of total contract amount upon completion of Deliverable 2

40 % of total contract amount upon completion of Deliverable 3

 

6. Monitoring / Reporting Requirements

The Consultant will work under the overall guidance Programme Coordinator, Economic Recovery and Restoration of Critical Infrastructure of the Recovery and Peacebuilding Programme. The Consultant will directly report to the Programme Coordinator on a monthly basis through in-person meetings/by phone or Skype or sending electronic materials.

The Consultant should adhere to the system of monitoring, evaluation and quality control implemented by the UNDP and provide the necessary information, reports and statistics according to the preset schedule or as soon as possible (within a reasonable time).

Weekly operational email reports on the current stage of implementation should be submitted to UN RPP. The issues faced during the implementation process are also required to be raised.

UN RPP has a right to request brief reports on the progress of the assignment during any stage of implementation.

Competencies

7. Experience and qualifications requirements

 

1. Education: at least Master’s or equivalent degree in Business Administration, Finance, Audit, Accounting or other related fields;
2. Experience: at least 5 years of professional experience in Audit/Finance/Accounting in MSMEs from non-agricultural and agricultural economy sectors;
3. Experience in producing knowledge materials/analytical documents/policy recommendations on taxation and reporting for MSMEs (at least 2 knowledge materials in open sources);
4. Language proficiency: excellent knowledge of Ukrainian and Russian, at least working level of English.

 

8. Documents to be included when submitting the proposals

Applicants shall submit the following documents:

	Professional CV, including information about past experience in similar projects / assignments;
	Financial proposal (according to defined deliverables);
	References to the documents justifying experience in preparation of knowledge materials/analytical documents/policy recommendations on taxation and reporting for MSMEs (references to at least 2 documents in the open sources);
	Reference letters from previous employers and/or customers (at least 2 letters).

 

9. Financial proposal

 

Lump sum contract

The financial proposal shall specify a total lump sum amount, and payment terms around specific and measurable (qualitative and quantitative) deliverables (i.e. whether payments fall in installments or upon completion of the entire contract). Payments are based upon delivery of the services specified in the TOR. In order to assist the requesting unit in the comparison of financial proposals, the financial proposal will include a breakdown of this lump sum amount.

The Consultant will be responsible for all personal administrative expenses associated with undertaking this assignment including office accommodation, printing, stationary, telephone and electronic communications, and report copies incurred in this assignment.

 

Travel costs

All envisaged travel costs must be included in the financial proposal. This includes all travel to join duty station/repatriation travel. In general, UNDP should not accept travel costs exceeding those of an economy class ticket. Should the IC wish to travel on a higher class he/she should do so using their own resources.

In the case of unforeseeable travel, payment of travel costs including tickets, lodging and terminal expenses should be agreed upon, between the respective business unit and Individual Consultant, prior to travel and will be reimbursed. In general, UNDP should not accept travel costs exceeding those of an economy class ticket. Should the Consultant wish to travel on a higher class he/she should do so using their own resources.

Required Skills and Experience

10. Evaluation criteria

 

UNDP will use a two-stage procedure for evaluating applications with the evaluation of the technical proposal being completed prior to any price proposals are compared. The technical part will be evaluated on the basis of its relevance to the Terms of Reference.

The breakdown scores for qualifications and experience are as follows:

1. Educational background in Business Administration, Finance, Audit, Accounting or other related fields – 10 points max [10 pts – PhD degree or higher; 5 pts – Master’s degree or equivalent];
2. Professional experience in Audit/Finance/Accounting in MSMEs from non-agricultural and agricultural economy sectors - 30 points max [30 pts – 6 or more years; 20 pts – 5 years];
3. Relevant professional experience in producing of knowledge materials on taxation and reporting for MSMEs – 25 points max [25 pts – 3 and more references on knowledge materials in open sources; 20 pts – 2 references on knowledge materials in open sources];
4. Language proficiency – 5 points max [5 pts – fluency in Ukrainian, Russian and English; 4 pts – fluency in Ukrainian and Russian, working level of English].

 

Evaluation method:

 

Cumulative analysis

Contract award shall be made to the incumbent whose offer has been evaluated and determined as:

a) responsive/compliant/acceptable, and

b) having received the cumulative highest score out of a pre-determined set of weighted technical and financial criteria specific to the solicitation.

* Technical Criteria weight: 70%

* Financial Criteria weight: 30%

Only candidates obtaining a minimum 70% from the maximum available technical score (49 points) would be considered for the Financial Evaluation.

The maximum number of points assigned to the financial proposal is allocated to the lowest price proposal and will equal to 30. All other price proposals will be evaluated and assigned points, as per below formula:

30 points [max points available for financial part] x [lowest of all evaluated offered prices among responsive offers] / [evaluated price].

The proposal obtaining the overall cumulatively highest score after adding the score of the technical proposal and the financial proposal will be considered as the most compliant offer and will be awarded a contract.