Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs.

Reform area: Strengthening domestic resource mobilization Outcome: a. Customs revenue increased by 15% (FY2017-FY2019 average growth baseline: 6.4%) Description: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment.

Action 1: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration. Action 2: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality. Action 3: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden. Action 4: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties. Action 1: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue. Action 2: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing. Action 3: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs. Action 4: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment. Action 1: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration. Action 2: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality. Action 3: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden. Action 4: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties. Action 1: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue. Action 2: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing. Action 3: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs. Action 4: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment. Action 1: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration. Action 2: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality. Action 3: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden. Action 4: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties. Action 1: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue. Action 2: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing. Action 3: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs. Action 4: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment. Action 1: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration. Action 2: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality. Action 3: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden. Action 4: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties. Action 1: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue. Action 2: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing. Action 3: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs. Action 4: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment. Action 1: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups. Action 2: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas. Action 3: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations. Action 4: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase. Action 1: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery. Action 2: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes. Action 3: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023. Action 4: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET. Action 1: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups. Target date: 2022-09-30 Target value: reduced to at most 2 work

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs.

Reform area: Strengthening domestic resource mobilization Outcome: b. Tourism receipts from international visitors increased by 10% (FY2017-FY2019 average growth baseline: 9.0%) Description: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs.

Reform area: Strengthening domestic resource mobilization Outcome: c. At least 75% SOEs under MOF achieved APC score of 75 (FY2020 baseline: not applicable [revised APC not drafted yet]) Description: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 1.1. (i) The parliament enacted the Customs Duty (Amendment) Act of Bhutan 2021 and Tax Act of Bhutan 2021, and (ii) MOF supported its implementation by operationalizing CRCMS to reduce revenue leakage and promote digitization of revenue administration.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 1.2. The parliament approved Tourism Levy Act of Bhutan 2022 to boost tourism revenue by increasing the Sustainable Development Fee and enhancing services quality.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 1.3. MOF approved a SOE Reform Strategy FY2023-FY2027, inclusive of a target to increase the share of women employees in SOEs to 35% by 2025, to restructure and improve management and governance of SOEs and to lower the fiscal burden.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 1.4. MOF approved Property Management Rules 2022 effective September 2022 to improve, streamline, and utilize the inventory of public properties to reduce wastage of fiscal resources and to generate additional resources through transfer of acquired properties.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 2.1. (i) The parliament enacted the Property Tax Act 2022 effective January 2023 to revise property tax rates to boost revenue;g and (ii) MOF operationalized eCMS in October 2023, following the amendment of 2017 Customs Rules and Regulations, to simplify customs clearance procedures and boost revenue.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 2.2. MOF approved (i) a MTRS effective April 2024 to enhance revenue mobilization and strengthen macro-fiscal framework; and (ii) the Sustainable Financing Framework 2024 effective April 2024 to diversify sources of financing.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 2.3. MOF commenced the implementation of the SOE Reform Strategy FY2023-FY2027 starting with (i) the amendment of Performance Management System Guidelines 2023, which entails revision of APCk to recalibrate the weightage for financial and non-financial indicators, to enhance SOE governance and management, and to better reflect SOEs' performance with APC score starting FY2024; (ii) the amalgamation of National CSI Development Bank Limited with Bhutan Development Bank Limited effective October 2023 following a Cabinet decision and RMA authorization; and (iii) the approval of CSO guidelines to rationalize subsidies by establishing proper financing procedures for CSOs, and specifying structural separation of business and non-business functions of SOEs.

Reform area: Strengthening domestic resource mobilization Outcome: d. At least one revenue related dimension of PEFA performance indicators showed improvement by FY2025. (FY2021 baseline: not applicable [latest PEFA assessment not completed yet]) Description: 2.4 MOF, following 2023 PEFA assessment, (i) approved the PFM Reform Strategy and Action Plan 2023-2028, inclusive of gender-responsive and climate-responsive PFM strategies, in October 2023 to deepen PFM reforms including revenue mobilization and rolling out an IFMISm; and (ii) published a yearly status update starting FY2024 on the strategy's implementation to enhance PFM reforms and address gaps identified in PEFA assessment.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023.

Reform area: Promoting private sector development Outcome: e. At least 15 CSIs benefitted from CSI Startup Center (of which 40% are women-led or women-owned) (FY2021 baseline: not applicable [CSI start-up agency does not exist yet]) Description: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET.

Policy 2: Promoting private sector development NA Action 2: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas. Target date: 2022-09-30 Target value: reduced to at most 2 work Action 3: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations. Target date: 2022-09-30 Target value: reduced to at most 2 work Action 4: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase. Target date: 2022-09-30 Target value: reduced to at most 2 work Action 1: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery. Target date: 2024-06-30 Target value: reduced to at most 2 work

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023.

Reform area: Promoting private sector development Outcome: g. TVET enrollment (TTIs and IZCs) increased by 40% (35% enrolled are female) (2020 baseline: 23.4% (26.8% enrolled are female) Description: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023.

Reform area: Promoting private sector development Outcome: h. At least one pre-feasibility study of a potential PPP project completed (2021 baseline: not applicable [list of such studies does not exist]) Description: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 1.10. MoEA approved the revised Alternative Renewable Energy Policy 2022 effective August 2022 to promote and diversify energy mix and reduce overreliance on hydropower.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 1.11. RMA approved guidelines for green finance taxonomy to facilitate categorization of projects for lending by financial sector and promote green finance, including priority accorded to women-owned or women-led businesses.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 1.9. NEC approved regulations on substances that deplete the ozone layer and HFCs effective January 2022 to regulate production, import and export of ODS and HFCs as well as ODS-containing products, in accordance with the country's obligations under the Vienna Convention and the Montreal Protocol.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 2.10. (i) DECC approved a Long-term Low Greenhouse Gas Emission and Climate Resilient Development Strategy, inclusive of gender-responsive strategy, following Climate Change Policy 2020, to provide long-term direction on mitigation measures, and to affirm commitment to staying carbon neutral; and (ii) Ministry of Energy and Natural Resources approved the Guideline for Development of Distributed Energy Resources System 2023 to promote diversification of energy sources and reduce overreliance on hydropower.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 2.11. (i) MOF approved the economy-wide Green Finance Taxonomy of Bhutan, including determination of eligible activities and technical screening criteria, in April 2024 to promote financial flows towards activities that support sustainable development (ii) RMA started implementation of green taxonomy in financial sector and approved ESRM guidelines in April 2024; and (iii) the Cabinet approved the establishment of Bhutan Climate Fund in October 2023 and the DECC established a Technical Working Group for Carbon Credit to coordinate and facilitate the country's participation in global carbon market.

Reform area: Facilitating green recovery Outcome: i. Share of renewable energy (except hydroelectricity) in total energy consumption increased to 2.5% (FY2018-FY2020 average baseline: 1.8%) Description: 2.9. DECC approved a gender-responsive NAP 2023 and started its implementation with the endorsement of NAP sectoral implementation roadmaps, including a financing strategy, for agriculture, energy, and water sectors to promote gender-responsive adaptation measures in line with the Paris Agreement and limit fiscal cost of climate change-induced shocks and stresses.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 1.10. MoEA approved the revised Alternative Renewable Energy Policy 2022 effective August 2022 to promote and diversify energy mix and reduce overreliance on hydropower.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 1.11. RMA approved guidelines for green finance taxonomy to facilitate categorization of projects for lending by financial sector and promote green finance, including priority accorded to women-owned or women-led businesses.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 1.9. NEC approved regulations on substances that deplete the ozone layer and HFCs effective January 2022 to regulate production, import and export of ODS and HFCs as well as ODS-containing products, in accordance with the country's obligations under the Vienna Convention and the Montreal Protocol.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 2.10. (i) DECC approved a Long-term Low Greenhouse Gas Emission and Climate Resilient Development Strategy, inclusive of gender-responsive strategy, following Climate Change Policy 2020, to provide long-term direction on mitigation measures, and to affirm commitment to staying carbon neutral; and (ii) Ministry of Energy and Natural Resources approved the Guideline for Development of Distributed Energy Resources System 2023 to promote diversification of energy sources and reduce overreliance on hydropower.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 2.11. (i) MOF approved the economy-wide Green Finance Taxonomy of Bhutan, including determination of eligible activities and technical screening criteria, in April 2024 to promote financial flows towards activities that support sustainable development (ii) RMA started implementation of green taxonomy in financial sector and approved ESRM guidelines in April 2024; and (iii) the Cabinet approved the establishment of Bhutan Climate Fund in October 2023 and the DECC established a Technical Working Group for Carbon Credit to coordinate and facilitate the country's participation in global carbon market.

Reform area: Facilitating green recovery Outcome: j. At least 25% commercial banks adopted green taxonomy (FY2021 baseline: not applicable [green taxonomy does not exist yet] Description: 2.9. DECC approved a gender-responsive NAP 2023 and started its implementation with the endorsement of NAP sectoral implementation roadmaps, including a financing strategy, for agriculture, energy, and water sectors to promote gender-responsive adaptation measures in line with the Paris Agreement and limit fiscal cost of climate change-induced shocks and stresses.

Policy 2: Promoting private sector development NA Action 2: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes. Target date: 2024-06-30 Target value: reduced to at most 2 work Action 3: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023. Target date: 2024-06-30 Target value: reduced to at most 2 work Action 4: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET. Target date: 2024-06-30 Target value: reduced to at most 2 work Action 1: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups. Action 2: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas. Action 3: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations. Action 4: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase. Action 1: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery. Action 2: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes. Action 3: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023. Action 4: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET. Action 1: 1.5. The Cabinet approved the autonomy of CSI Startup Center with effect from July 2021 to effectively manage and deliver business development services required for promotion of startups. Action 2: 1.6. MOF approved Rules on the Fiscal Incentives Act of Bhutan 2021, effective November 2021, to implement Fiscal Incentives Act of Bhutan 2021 to promote newly established and existing CSIs, and to promote economic activity in rural areas. Action 3: 1.7. MoEA approved rules and regulations effective June 2022 for delicensing operation of new or expansion of existing restaurant and retail business to ease licensing processes and regulations. Action 4: 1.8. (i) The Cabinet approved TVET Reform Plan 2021—including a plan to increase female enrollment along with gender-sensitive infrastructure facilities and women friendly courses— to provide strategic direction to TVET activities, especially to redesign and modernize it commensurate with changing economic needs and demand from the private sector, and (ii) Department of Labour commenced implementation of FWMS, following a MoLHR order effective December 2021, to address the shortage of skilled workforce during the recovery phase. Action 1: 2.5. The Cabinet (i) established an Economic Development Board effective March 2024 to encourage domestic and foreign direct investment; (ii) approved Trade and Industry Rules 2023—a harmonized, consolidated, and updated rules and regulations governing private sector development—to promote investment and trade; and (iii) amended PPP Policy in April 2024 to facilitate private sector participation in the provision of infrastructure and services delivery. Action 2: 2.6. MoEA developed and operationalized an IBLSp, following CSI Policy 2019, effective 2023 to enhance ease of doing business for CSIs, especially end-to-end automation including digitization of registration and approval processes. Action 3: 2.7. (i) The government operationalized the Government to Business Service Center effective August 2023 by consolidating and simplifying G2C, G2B, and G2G services to promote private sector development and digitization; (ii) MoICE operationalized a Harmonized Product Standardization and Certification System Portal to promote digitization in trade services effective 2023. Action 4: 2.8. (i) The Cabinet approved National Education Policy, integrating TVET, effective April 2024t; (ii) the government established Bhutan Qualification and Professional Certification Authority as a new regulatory authority for TVET, as per the administrative reorganization by Royal Civil Service Commission in December 2022; and (iii) MoESD approved National TVET Gender Strategy 2024-2028 to promote gender equality in TVET. Action 1: 1.9. NEC approved regulations on substances that deplete the ozone layer and HFCs effective January 2022 to regulate production, import and export of ODS and HFCs as well as ODS-containing products, in accordance with the country's obligations under the Vienna Convention and the Montreal Protocol. Action 2: 1.10. MoEA approved the revised Alternative Renewable Energy Policy 2022 effective August 2022 to promote and diversify energy mix and reduce overreliance on hydropower. Action 3: 1.11. RMA approved guidelines for green finance taxonomy to facilitate categorization of projects for lending by financial sector and promote green finance, including priority accorded to women-owned or women-led businesses. Action 1: 2.9. DECC approved a gender-responsive NAP 2023 and started its implementation with the endorsement of NAP sectoral implementation roadmaps, including a financing strategy, for agriculture, energy, and water sectors to promote gender-responsive adaptation measures in line with the Paris Agreement and limit fiscal cost of climate change-induced shocks and stresses. Action 2: 2.10. (i) DECC approved a Long-term Low Greenhouse Gas Emission and Climate Resilient Development Strategy, inclusive of gender-responsive strategy, following Climate Change Policy 2020, to provide long-term direction on mitigation measures, and to affirm commitment to staying carbon neutral; and (ii) Ministry of Energy and Natural Resources approved the Guideline for Development of Distributed Energy Resources System 2023 to promote diversification of energy sources and reduce overreliance on hydropower. Action 3: 2.11. (i) MOF approved the economy-wide Green Finance Taxonomy of Bhutan, including determination of eligible activities and technical screening criteria, in April 2024 to promote financial flows towards activities that support sustainable development (ii) RMA started implementation of green taxonomy in financial sector and approved ESRM guidelines in April 2024; and (iii) the Cabinet approved the establishment of Bhutan Climate Fund in October 2023 and the DECC established a Technical Working Group for Carbon Credit to coordinate and facilitate the country's participation in global carbon market. Action 1: 1.9. NEC approved regulations on substances that deplete the ozone layer and HFCs effective January 2022 to regulate production, import and export of ODS and HFCs as well as ODS-containing products, in accordance with the country's obligations under the Vienna Convention and the Montreal Protocol. Action 2: 1.10. MoEA approved the revised Alternative Renewable Energy Policy 2022 effective August 2022 to promote and diversify energy mix and reduce overreliance on hydropower. Action 3: 1.11. RMA approved guidelines for green finance taxonomy to facilitate categorization of projects for lending by financial sector and promote green finance, including priority accorded to women-owned or women-led businesses. Action 1: 2.9. DECC approved a gender-responsive NAP 2023 and started its implementation with the endorsement of NAP sectoral implementation roadmaps, including a financing strategy, for agriculture, energy, and water sectors to promote gender-responsive adaptation measures in line with the Paris Agreement and limit fiscal cost of climate change-induced shocks and stresses. Action 2: 2.10. (i) DECC approved a Long-term Low Greenhouse Gas Emission and Climate Resilient Development Strategy, inclusive of gender-responsive strategy, following Climate Change Policy 2020, to provide long-term direction on mitigation measures, and to affirm commitment to staying carbon neutral; and (ii) Ministry of Energy and Natural Resources approved the Guideline for Development of Distributed Energy Resources System 2023 to promote diversification of energy sources and reduce overreliance on hydropower. Action 3: 2.11. (i) MOF approved the economy-wide Green Finance Taxonomy of Bhutan, including determination of eligible activities and technical screening criteria, in April 2024 to promote financial flows towards activities that support sustainable development (ii) RMA started implementation of green taxonomy in financial sector and approved ESRM guidelines in April 2024; and (iii) the Cabinet approved the establishment of Bhutan Climate Fund in October 2023 and the DECC established a Technical Working Group for Carbon Credit to coordinate and facilitate the country's participation in global carbon market.

Loan 4453: 100% of contracts awarded and 100% disbursed as of 05 Sep 2024