REPUBLIC OF CROATIA
Zagreb - December 2008

TABLE OF CONTENTS
I. General Background .............................................................................................. 3
II. Background Specific to the Assignment .............................................................. 4
III. Objective of the Assignment ............................................................................. 65
Iv. Scope of Work. .................................................................................................... 6
A. Timing ............................................................................................................. 6
B. Activities ......................................................................................................... 6
C. Languages....................................................................................................... 8
V. General Responsibilities ....................................................................................... 9
A. Reporting Relationships ............................................................................... 9
B. Periodic Reports and Communications ....................................................... 9
C. Resources Provided ..................................................................................... 10
D. Restrictions................................................................................................... 10
VI. Qualifications .................................................................................................... 10
VII. Deliverables And Timing ................................................................................ 11
VIII. List of Attachments ........................................................................................ 12

The Government of the Republic of Croatia has embarked on a reform of revenue administration.
The impetus for these reforms includes the need for the Croatian revenue administration to keep pace with the requirements of a globally competitive, market economy and to set the stage for EU Accession.
The Croatian Tax Administration (CTA) is a subordinate agency under the Ministry of
Finance. The CTA has primary responsibility for the administration of national and local taxes, as well as social insurance collections (i.e., approximately 70% of total revenues). The
CTA employs approximately four thousand staff in one hundred twenty local offices and twenty regional offices. The CTA is headed by a Director General, with a Headquarters unit in Zagreb. The tax offices in Zagreb account for nearly three quarters of total revenues.
To support the reforms the Government has obtained a 50 million €uro loan from the World
Bank to help finance the Revenue Administration Modernization Project (RAMP). The project will be implemented during 2008-2012. It has the following components:
A. Organizational Consolidation and Functional Realignment of the Zagreb Tax
Office. (Physically consolidate the tax offices in the Zagreb Region into a single modern facility. Reorganize the consolidated office along functional lines. Rationalize and strengthen large taxpayer administration.)
B. Knowledge and Professional Upgrading of Tax Officials and Stakeholders.
(Strengthen the CTA’s human resource management capacity. Upgrade the
CTA’s training and knowledge-sharing programs. Establish a Tax Training
Center and distance learning facilities.)
C. Technological Upgrading for Services, Management Information System and
TIN Implementation. (Modernize business processes, including e-Tax functions. Acquire contemporary, integrated tax administration application software. Implement appropriate security, business-continuity and disasterrecovery capabilities. Implement an integrated Management Information
System. Help implement the new Taxpayer Identification Number – TIN.)
D. Modernization Management and Project Support.
(Develop a Strategy Plan for CTA Modernization. Support project governance, management and administration, including monitoring and evaluation.).
The legal framework for Croatia’s tax administration is set out in the General Taxation Act, the Tax Administration Act, and the various substantive tax laws. The General Tax Act

regulates the relationship between taxpayers and tax authorities by setting out the general administrative procedures of the tax system (including jurisdiction, maintenance of books and records, filing tax returns, payment of the assessed tax, audit, enforced collection, penalties, and disputes resolution). The Tax Administration Act establishes the CTA’s organizational structure as well as the special obligations, responsibilities, and authorities of tax administration officials. The substantive tax laws (e.g., income tax, profit tax, value-added tax) establish the administrative procedures that are specific to each tax.
The Croatia Tax Administration (CTA) was established in 1994 as an administrative organization within the Ministry of Finance whose primary responsibility is to apply Croatia’s revenue legislation. Over time, the CTA’s revenue collection responsibilities have gradually been extended and now cover all national and local taxes (other than excises and international duties and taxes), social insurance contributions, and a large number of levies, fees, and charges.
The organization is headed by a Director General who holds a position of State Secretary and is appointed by and reports to the Minister of Finance. The CTA’s 4,310 staff are assigned to an office network comprising a headquarters with 227 staff, and twenty regional offices and subordinate local offices. The Zagreb offices account for 1,195 staff.
The headquarters, located in Zagreb, is responsible for developing national policies and programs, and is organized mainly according to tax administration function. The Director
General is supported by 11 assistant directors each of whom oversees one of the agency’s 11 divisions. The CTA plans to restructure its headquarters organization—in terms of its organizational structure, staffing, and management processes—to enhance its capacity to manage national operations and support the implementation of its modernization strategy.
The CTA’s twenty regional offices are responsible primarily for conducting field audits and criminal tax investigations, executing the more severe collection enforcement actions, and supervising the branch offices. As in the case of headquarters, regional staff are organized into units based on tax administration function.
Local offices collect and process tax returns and payments from individuals and legal entities and also conduct desk reviews of tax returns, provide taxpayer services, and initiate initial enforcement actions. In most local offices, staff are organized into teams with each tax officer assigned a set of taxpayers for whom they provide a range of tax administration functions (assistance, assessment, desk review, initial enforcement). To achieve efficiencies in administration, the CTA plans to consolidate its large network of branch offices beginning with ten of the Zagreb Region’s ten local offices.
In 2005, special arrangements were introduced for administering large taxpayers in Zagreb and four other regions. At present, the large taxpayer offices function independently of each other, essentially constituting special units reporting to various regions within the region/branch structure.
The 4,380 staff of the CTA fall into thirty-one occupational categories. Seven are managerial.
Four are classified at the senior level. Three of which are classified “consultant”. Three are other high level tax and IT consultants. Nineteen other categories comprise different levels of inspectors, administrative personnel and IT specialists. One category covers drivers, telephone operators and the like. Nearly one-third of staff has obtained a university degree in fields related to the business of the CTA (i.e., economics, law and accountancy).

A Decree on Classification of Working Posts became effective September 2007. A proposed
Salary Act is expected to be ratified by Parliament by September 2008 and become effective
January 2009. This required the HR Department to analyze all existing posts and position descriptions and classifications. New detailed job descriptions will be included in the new classification and pay scheme for the CTA.
Employment and other Human Resource Staff of the CTA are governed by various Civil
Service Acts. The most important are:

Decree on the announcement of vacancies and implementation of public competition procedures and internal announcements in the civil service.

Standards and criteria for civil service job titles and descriptions.

Decree on modalities of and career advancement for civil servants.

Decree on type, manner, and conditions for education for civil servants.

State Administration Organization Act.

General Administrative Proceedings Act.

Ethical Code of State Officials.
The CTA’s Human resource management is performed at Headquarters by the Human
Resources and Training Division. The Division currently has seven staff members: two independent administrative officers; one senior executive officer, one executive officer and two trainees.
The Division organizes training for CTA staff. During March-July 2008, it carried out an analysis of working posts in compliance with EU requirements and norms, as well as with the
Standards and Criteria for Civil Service Job Titles and Descriptions
Requirements and training methods for officers are prescribed in a Decree on Forms, Methods and Conditions for Training of Civil Servants. General education is organized through the
Center for Civil Servants Education, within the framework of Central Office of General
Administration. CTA employees undergo general education (e.g., preparation for civil service examination, public policies, communication skills, etc.) in the training center, according to the needs and financial resources earmarked for this purposes. Specialized training programs
(e.g., programs for audit officers, taxpayer accounting, bankruptcies, enforced collection, etc.) is organized by the CTA HR Division, in line with the CTA’s needs, demands, and available financial resources. Pursuant to the Decree, a survey is conducted at the end of each year to assess the need for educating civil servants. The results of the survey are used as the basis for implementing an annual training plan.
The objective of the assignment is to help the CTA develop a Long Term (5 year) Human
Resource Management Strategy and Plan that is cognizant of the CTA current human

resources, its business needs going forward, and the relevant constraints to restructuring and re-skilling staff and management to meet the CTA’s evolving business needs and environment.
The Consulting Firm (here after the “Consultant”) will perform the assignment’s activities as described below.
A.
T IMING
The assignment shall commence on March 2, 2009 and conclude on June 30, 2009. Expected maximum duration of the assignment is four months.
According to the CTA estimates the assignment should entail approx. 10 staff/months
Contingent on satisfactory performance of the assignment, the CTA may request the
Consultant to prepare a proposal to help supervise the implementation of the Plan.
.
B.
A CTIVITIES
The activities under the assignment entail an assessment of current Human Resource
Management arrangements of the CTA and assistance to the CTA to develop a modern
Human Resources Management Strategy and Training and Development Strategy and
Implementation Plan.

Familiarization/Initiation . o Review the GOC Policy Letter on Tax Administration Modernization, other high level policy statements pertaining to the Croatian Tax Administration and the Croatian public administration, and the RAMP documentation, and the
Laws and Regulations pertaining to tax administration. o Identify available CTA information and staff resources which may be useful to the assignment. o Research and present to the CTA/MOF a summary of international practices and experiences in Human Resource Management in tax administrations. o Develop a preliminary set of metrics (and benchmarks) to assess the performance of the CTA’s Human Resource Management. o Compile an initial profile of the CTA’s staff and management and of the
CTA’s Human Resource Management Capacities. o Prepare, present and agreed with the CTA/MOF on an Inception Report.
Describe, inter alia , assignment goals and outputs, timing and inputs

(Consultant and CTA), critical success factors, quality control and problem resolution methods, summary of familiarization phase outputs, etc.

Diagnostics . o Assess current practices and review key Human Resources processes (HR
Administration, Selection, Recruitment and On-boarding, Training and Career
Development, Performance Management and Compensation Management in relation to the relevant metrics and international practices and experiences. o Assess the CTA’s current organizational structure, staffing levels and ratios, profiles and skills mix in relation to the contemporary best practices in EU tax administration. o Analyze relevant legislative and regulatory context and identify key constraints for efficient and effective Human Resource Management by the CTA. o Analyze current legislative context and practices in the area of performance management and rewards and recognition. Provide EU benchmarks and international best practices. o Provide set of recommendations to address main challenges in the human resources management (e.g. attracting and retaining professional staff). o Assess current HR metrics and data sources and identify the gaps in the human resources data requirements. o Assess the organizational and management arrangements used by the CTA to manage its Training and Development function in relation to the relevant metrics and international practices and experiences. o Identify competencies model and propose Training Needs Analysis framework. o Review the education and training programs provided to staff, including internal and external education and trainings and provide recommendations as input into the Training and Development Strategy and Implementation Plan. o Prepare and present to the CTA/MOF and key stakeholders a Draft Diagnostic
Report. o As appropriate, revise, present, and reach agreement on a Final Diagnostic
Report. o Assure knowledge transfer to CTA Human Resources Department on key HR data and metrics and the best practices in setting up and managing internal training center.

Recommendations.
o Based on the agreed Diagnostic Report, prepare and present to the CTA/MOF and key stakeholders a Draft Recommendations Report.

o As appropriate, revise, present, and reach agreement on a Final
Recommendations Report. o Based on the Final Recommendations Report, assist the CTA prepare a Draft
Long-term Human Resources Management and Trainig and Development
Strategy and Implementation Plan and assist the CTA present Draft Plans to the MOF and key stakeholders, such as Civil Service Administration, business forum. o As appropriate, help the CTA revise, present, and reach agreement on a Final
Long-term Human Resources Management and Training Strategy and
Implementation Plan.
C.
L
ANGUAGES
The Consultant shall work in the English and Croatian languages. Specifically, all communications shall be carried out in English or Croatian. All documents shall be presented in the Croatian language with English translations of the Executive Summaries and all key tables and charts. The Consultant may be requested to assist the CTA in ensuring high quality translation of the documents and interpretation of the developed materials.
The Consultant shall be responsible for providing the interpretation and translations services.
A.
R EPORTING R ELATIONSHIPS
The Consultant will report to and work under the direction of the Director General of the CTA and the Project Director (Assistant Director General). The Deputy Director General of
Human Resources and the Head of the Human Resources Department will be the Consultant’s main counterpart on key substantive matters. The Deputy Director General of Human
Resources will facilitate the Consultant’s access to the necessary documentary materials as well as access to the key stakeholders to the assignment.
In the Consultant’s working relations with the Client and all the key stakeholders, the
Consultant will be expected to be self-sufficient and conduct him/herself in the highest professional manner.
B.
P ERIODIC R EPORTS AND C OMMUNICATIONS
The Consultant shall prepare:
(a) An Inception Report which shall describe the Consultant’s: (i) proposed approaches for fulfilling his engagements under the Contract; (ii) proposed clarifications to the resources to be provided by the Consultant and the Client; (iii) view as to any preconditions for successful execution of the assignment; (iv) an action plan for

fulfillment of the assignment; and (v) any other matter which the Consultant wishes to raise relative to the assignment or the Project.
(b) Monthly Progress Reports that summarize, among other things, (i) results accomplished during the prior period; (ii) cumulative deviations to date from schedule of progress milestones; (iii) corrective actions to be taken to return to the planned schedule of progress; (iv) proposed revisions to the planned schedule; (v) proposed actions to be taken and inputs provided by the Consultant in the upcoming period; (vi) resources that the Consultant expects to be provided by the CTA and/or actions to be taken by the CTA in the next reporting period; (vii) other issues or potential problems the Consultant foresees that could impact on assignment progress and/or effectiveness. These shall be submitted to the Deputy Director General or his designee by end of the first week of the following month.
(c) A Final Report that summarizes the work performed, results achieved, and recommendations for follow-on action to further the objectives of the contract or otherwise promote success of the Project.
C.
R
ESOURCES
P
ROVIDED
The Consultant shall be responsible for providing all necessary human, logistical and material resources to undertake the assignment
The CTA will provide coordination assistance with state bodies, including the CTA sub-units.
It will also provide meeting logistics and space for the Consultant’s presentations to the
CTA/MOF. The CTA will provide timely access to any CTA data that have been identified and agreed upon in the Inception Report (with due consideration of the legal requirements for privacy and confidentiality).
D.
R ESTRICTIONS
All materials created under this Contract will remain the sole property of the CTA. Re-use of the materials will require the formal, written approval of the CTA.
On the commencement of the assignment, the Consultant will jointly prepare with the CTA a statement of confidentiality that will bind the Consultant to nondisclosure of any sensitive information that the Consultant may become knowledgeable of during the course of the assignment. The terms of this agreement shall be made consistent with the relevant privacy laws of the Republic of Croatia.
The Consultant shall have demonstrated experience and expertise in the field of Human
Resource Management and in Training, preferably in revenue administrations.
Qualification requirements for the consulting firm:
General: At least 5 years of experience on consulting to firms or public agencies on human resources management practices

Specific: Having implemented similar assignments in the area of human resources strategy, organization development, training and career development.
Minimally the Consultant’s team shall include the following members with the respective qualifications.
Senior Human Resource Management Expert (2)

Advanced degrees in human resources management, public administration, or the equivalent.

At least 5 years of experience in human resources management field at the executive level.

At least 5 years of experience in senior management position for human resources management in the public and/or private sector.

Demonstrated successful experience in managing and/or assessing human resource management systems in revenue administrations.

At least 5 years of experience leading and managing project teams of commensurate size and complexity.

Ability to speak, write and read English fluently.
Training Specialist

Advanced degrees in education and training, public administration, or the equivalent.

At least 5 years of experience developing training programs, preferably for revenue administrations.

At least 3 years of experience in curriculum development in an e-learning environment with knowledge of required delivery systems, infrastructure, and, technical requirements.

Demonstrated successful experience in working with human resource capacity building in revenue administrations.

Ability to speak, write and read English fluently.
The Consultant shall deliver:

Inception Report (Week 2).

Draft Diagnostic Report and presentations (Week 4).


Final Diagnostic Report and Recommendations (Week 5).

Draft Recommendations Report and presentations (Week 6).

Final Recommendations Report (Week 7)

Draft Long-term Human Resources Management and Training and Development
Strategy and Implementation Plan and presentations (Week 10).

Final Long-term Human Resources Management and Training and Development
Strategy and Implementation Plan (Week 14).

Final Report (Week 16)
A.
GOC Policy Paper on Tax Administration.
B.
RAMP Project Appraisal Document (PAD).
C.
CTA Employee Totals by Office
D.
Current Position Classifications
E.
CTA Human Resources Division Organization Chart
F.
CTA Training Program Previous and Current (2008)