## sipea2025006

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---

### Kosovo's Strategic Framework for Digitalization
- Kosovo adopted the Digital Agenda of Kosovo 2013–20 (DAK 2020) in 2013 to develop digital infrastructure, promote electronic content, and enhance citizens’ digital literacy.
- 2015 government modernization project to build a more advanced digital administration.
- 2018: secured US$ 20.7 million from the World Bank for the Kosovo Digital Economy (KODE) project to improve access to high-quality, high-speed broadband services.
- By March 2023, the last remaining non-connected village was linked to high-speed Internet (with speeds of up to 100Mbps), achieving one of the highest Internet coverages in Europe.
- Kosovo joined the Increasing Civic Engagement in the Digital Agenda (ICEDA) project (EU co-financed, led by Metamorphosis Foundation).
- Digital Agenda of Kosovo 2030 (DAK 2030) strategic goals:
  - 1) establishing an advanced secure digital infrastructure;
  - 2) driving the digital transformation of businesses;
  - 3) enhancing the digitalization of public services;
  - 4) fostering a digitally skilled population and innovative R&D ecosystem;
  - 5) strengthening the cybersecurity framework.
- DAK 2030 targets:
  - full national 5G coverage;
  - gigabit connections to all households and businesses;
  - bring all key public services and medical records online;
  - attain 90 percent adoption of digital IDs among citizens;
  - reach 80 percent adoption of cloud computing, AI, and big data technologies among companies.
- e-Government Strategy 2023–27 (adopted October 2023) is a cornerstone of DAK 2030; complemented by Public Administration Reform Strategy, Administrative Burden Prevention and Reduction Program, and Cyber Security Strategy.

### Enablers of Digitalization in Kosovo
- Internet access and coverage:
  - 99.8 percent of households had access to the Internet (as of 2022).
  - 100 percent of enterprises had broadband connectivity—27 percent of which is fiberoptic.
  - 99.5 percent of the population is covered by at least a 3G network.
  - 4G covers 94 percent and 5G covers 65 percent of the territory.
- Internet affordability and adoption:
  - fixed broadband basket = 2.3 percent of monthly GNI per capita;
  - mobile cellular data basket = 1.4 percent of monthly GNI per capita.
  - 24.5 percent of the population subscribe to fixed broadband;
  - 88 percent of the population subscribe to mobile cellular data.
  - UNDP Digital Household Survey: 86 percent of respondents had access to Internet at work; 29 percent used free public wireless.
- Infrastructure quality:
  - Telecom of Kosovo faces capacity challenges.
  - Mobile Internet download speeds rank near the bottom among regional peers.
  - Government implementing National ICT Strategy to enhance digital infrastructure.
- Digital skills and usage disparities:
  - Higher-income and more educated individuals engage in education and business-support online activities; lower-income and less educated individuals mainly use Internet for social communication and casual browsing.
  - Kosovo Agency of Statistics: one-third of the population familiar with downloading/installing software and copying/moving files; even fewer proficient in basic office software.
- E-commerce and constraints:
  - E-commerce remains nascent; Covid-19 spurred experimentation and banks introduced online banking.
  - All utilities offer online bill payment options.
  - 44 percent of individuals report not knowing online banking platforms.
  - Major e-commerce websites ship only limited goods to Kosovo.
  - Third-party and instant payment methods currently unavailable.
  - Securing an official top-level domain for Kosovo expected to positively impact economy, data traffic monitoring, and cybersecurity.
- Projects and initiatives:
  - KODE project (initiated 2019) extended fiber optic infrastructure to rural areas and aimed to connect schools and public institutions.

### GovTech Solutions to Modernize Fiscal Operations
- GovTech maturity:
  - Moved from group C to group B in World Bank’s GovTech Maturity Index.
  - Scored 63 (scale 0–100); ranked middle among Western Balkan peers.
  - Performs relatively better in Public Service Delivery Index; needs strengthening in GovTech enablers and Digital Citizen Engagement Index.
- Revenue administration (Tax Administration of Kosovo, TAK):
  - Mandatory e-filing and e-payment systems introduced in 2022.
  - Since January 1, 2022, TAK only accepts electronic tax declarations; taxpayers without Internet can use regional office computers.
  - Taxes must be paid through commercial banks; funds electronically transferred to Treasury with payment details transmitted to TAK daily.
  - TAK developed a Taxpayer Portal for online declarations, payments, and personal information updates.
  - ISORA digitalization index: Kosovo scored 55.6 out of 100.
  - ISORA peers: Albania 64.1, Bosnia and Herzegovina 55.1, Montenegro 31.8, Serbia 70.2.
  - End-2022: a pre-Covid-19 tax IT modernization contract was canceled; current system needs improvements for advanced analytics and real-time compliance tracking.
  - Absence of a data warehouse hampers data management and analytics for tax evasion risk identification.
  - Constraints: insufficient funding and limited IT workforce.
  - Recommended TAK priorities:
    - step-by-step expansion of TAK functionalities to risk management, e-invoicing, and cash management;
    - enhance human resources capacity and secure investments;
    - consider adopting a Commercial Off-The-Shelf (COTS) solution for best practices, user-friendliness, and transparency;
    - engage stakeholders in change management and ensure cohesive implementation.
- Public Financial Management (PFM) systems:
  - Multiple non-integrated systems:
    - Kosovo Financial Management Information System (KFMIS): FreeBalance application for budget execution; centralized; asset management records assets above EUR 1,000; needs multi-year commitments functionality.
    - Public Investment Program (PIP): IT system and SQL database capturing investment projects; full project cycle functionality; supporting documents often missing; needs completion to be effective planning tool.
    - Budget Development Management System (BDMS): custom-made since 2004; updated for three-year MTEF; used mainly for recurrent expenditures; Budget Department working to link PIP and BDMS to KFMIS.
    - e-Procurement System: centralized end-to-end procurement system; mandatory for all Contracting Authorities; Treasury working to link KFMIS with e-procurement to improve multi-annual contract access and automate invoice capturing.
  - Treasury Single Account (TSA) at Central Bank of Kosovo consolidates government cash balances and manages budgetary flows for central and local governments.
  - Tax and non-tax revenues swept into the TSA daily with no lag between collection and sweeping.
  - Government cash outflows reconciled daily via integration between KFMIS and CBK payment system.
  - Current shortcomings:
    - information systems often operate in isolation;
    - invoice reporting manual and unreliable (monthly Excel submissions from Budget Organizations to Treasury Department);
    - lack of systematic recording of multi-annual contracts, hindering budget planning and assessment of fiscal space and investment progress.
  - Reform actions in progress:
    - tender—supported by GIZ—for new e-Procurement platform to be delivered in Fall 2025;
    - Treasury seeks to automate invoice capturing and link PIP, BDMS, and KFMIS for improved transparency and arrears control.

### Digitalization of PFM and Business Process Reengineering
- Priorities:
  - adopt a "capture data only once" policy and establish robust data governance to ensure data quality.
- Data integrity actions:
  - clean PIP data, implement validation checks, and exclude non-compliant projects from the MTEF pipeline.
- Invoicing automation:
  - requires long-term business process reengineering and embedding changes during the review of the Law on Public Financial Management and Accountability.
- E-signatures:
  - once enabled, Treasury can begin to eliminate paper-based processing, supported by an ongoing training program for all system users.

### Provision of Digital Public Services (e-Kosova and interoperability)
- e-Kosova:
  - Launched in 2021 as a national public service portal.
  - Nearly a million registered users.
  - Kosovo statistical agency: 14.1 percent of citizens used the Internet to access information related to public services; 5.3 percent submitted forms through e-government platforms.
  - UNDP 2021 Digital Household Survey: among respondents who used e-Kosova, most used it only during COVID for vaccination appointments; tax services second most used, but only 5 percent declared having done it.
- Services and targets:
  - Platform offers 200 online services (to be expanded to 230 online services by end-2024), including civil status documents, utility payments, property taxes, judiciary services, police clearances, and pension benefit administration.
  - Pilot life-event approach: reengineer childbirth-related services by clustering related services across institutions.
  - National System for Electronic Identification (eID) target: 90 percent of the population using digital identities by 2030.
- Interoperability and Government Gateway (GG):
  - GG launched in 2017; slow initial traction due to technological and coordination limitations.
  - Usage accelerated in last 3 years: 50 central and local institutions and 48 information systems now connected.
  - Further integration of e-Kosova (service delivery) and GG (data exchange) vital to streamline processes and improve user experience.

### Social Dividends: Safety Nets, Education, and Health
- Social safety nets:
  - Social registry: approximately 600,000 beneficiaries included; inclusion via e-Kosova or social workers.
  - Electronic payments implemented for pensions, disability benefits, and Social Assistance Scheme (SAS); processed through Kosovo Pension Savings Trust and other bodies with funds transferred through the Treasury.
  - New social assistance payment system supported by basic accounts in private banks for SAS beneficiaries.
  - MIS investments supported by World Bank; as of May 2024, pilot MIS for SAS partially developed; SRMS and SWIS not yet initiated.
  - Digital inclusion and data security issues: rural populations rely on cash due to limited banking access or digital literacy; application processes remain in-person; data protection and privacy ongoing priorities.
- Education:
  - Kosovo Education Strategic Plan 2022–26 includes integrating digital technology as one of five pillars.
  - DAK 2030 objectives include basic IT skills and advanced competencies (coding, data analysis, cybersecurity); ensure all schools have high-speed Internet and modern digital tools.
  - Connectivity: all 750 and about 400 ancillary establishments are in some way connected to the Internet, but most have poor quality or partial coverage.
  - World Bank KODE Project: 100 schools connected to high-speed Internet; follow-up to extend high-speed Internet to 120 additional schools by the end of 2024.
  - DAK 2030: fourth strategic objective to create a "digital skilled population and innovative R&D ecosystem" supported by five specific objectives and 19 indicative activities.
  - Initiatives: free online training for e-commerce and e-government, revision of ICT programs, projects to increase women's inclusion in ICT, vocational IT practice programs, scholarships encouraging female students into STEM.
- Health:
  - Fragmentation and limited BHIS coverage:
    - BHIS limited in functionality and needs uniform implementation.
    - World Bank (2024): as of March 2024, only a third of PHC facilities estimated to have a fully functional BHIS, with less than 12 percent of visits registered in the system.
    - Only a few systems communicate with BHIS (e.g., public health surveillance system and pharmaceutical stock management system).
    - 475 health ambulatories remain to be connected to BHIS.
  - Connectivity and targets:
    - All 38 large primary and ca. 60 percent of district (medium-size) healthcare centers are connected to BHIS.
    - Target: integrated health information system based on Gigabit connectivity, generalized access to e-records by citizens by 2030.
  - World Bank KOMPAS project: roll out the IHIS, expand BHIS functionalities (including e-referrals and appointments), introduce a Hospital Management Information System for all regional hospitals, and improve data analytics at the National Institute of Public Health via a central data warehouse.

### Governance, Institutional Capacity, and Cybersecurity
- Coordination and interoperability:
  - Ministry of Interior responsible for interoperability frameworks and data governance policies; empowering the AIS to reevaluate core ICT systems.
  - Need to develop a comprehensive National Interoperability Framework and national interoperability standards aligned with e-Government Strategy 2023–2027 and the European Interoperability Framework.
  - Entrust DTU and AIS with clear mandate and resources to implement National Interoperability Framework.
  - Securing a top-level domain for Kosovo remains a priority to positively impact the economy, improve data traffic monitoring, and enhance cybersecurity.
- Cybersecurity capacity gaps and strategy:
  - Only a few key agencies have adopted effective practices after identifying cyber threats.
  - National cyber-incident response unit suffers from severe personnel shortages and low incident report volumes.
  - National Cyber Security Strategy (2023–2027): includes creating a cybersecurity agency and enhancing cyber incident response capabilities; aligns with e-Government Strategy and DAK 2030.
  - Recommendations: regular cybersecurity assessments and training programs for public servants.
- International and private-sector collaboration:
  - World Bank, European Union, USAID, IMF, UNICEF, Horizon Europe participation: support modernizing digital infrastructure, enhancing data management, capacity building, and aligning with EU regulations and best practices.
  - IMF support: designing a data warehouse for TAK and assessing readiness of PFM systems for digital invoicing processes.
  - Private sector partnerships: local IT firms, public-private partnerships for digital infrastructure expansion, hackathons, and innovation challenges to foster entrepreneurial ecosystem and R&D.

### Conclusions and Policy Recommendations
- Key observations:
  - Substantial progress reshaping fiscal operations and service delivery via e-Government Strategy 2023–2027.
  - Remaining challenges: digital usage deficits, poorly coordinated development, outdated and fragmented platforms, manual operational processes, and cybersecurity risks.
- Priority policy actions:
  - Invest in underserved areas:
    - KODE project expanded access to high-speed broadband in rural areas.
    - Government and World Bank collaboration to assess Internet penetration and service quality metrics; regularly monitor connectivity indicators.
  - Ensure a coordinated approach to digital transformation:
    - Implement a “whole-of-government” interoperability approach.
    - Entrust DTU and AIS with clear mandate and resources; implement the National Interoperability Framework.
    - Secure a top-level domain for Kosovo.
  - Modernize tax and PFM systems:
    - Develop e-filing and e-payment systems; address outdated technology and lack of a data warehouse.
    - Streamline business processes and resolve data integrity and isolation in PFM systems.
  - Establish robust cybersecurity measures and protocols:
    - Implement National Cybersecurity Strategy measures; conduct regular cybersecurity assessments and training.
  - Implement targeted digital literacy programs:
    - Launch initiatives to boost digital skills, especially for vulnerable groups; expand digital training and vocational IT programs aligned with labor market needs.
  - Consider Internet subsidies to increase mobile subscription rates:
    - Assuming price elasticity = minus 1, increasing mobile data subscription rate from 88 to 100 percent would require targeted subsidies equal to 0.02 percent of GDP.
    - Subsidy design options: supply-side (carriers and operators) or demand-side (users), through direct transfers or indirect benefits (lower fees and taxes).
    - Calculation provided in source: Mobile data targeted subsidies = (1 − .88) x (1 − .88)/.88 x .014 GNI/(−1) = .00023 GNI; using average GNP/GDP ratio for the past 15 years equal to 1.019 yields targeted subsidies equal to 0.02 percent of GDP.
  - Trace and publish KPIs:
    - Select and regularly publish KPIs to evaluate effectiveness, progress, and impact of digitalization initiatives.

*Source: sipea2025006 - chapter content on Kosovo digital transformation and PFM (PDF).*

### 1. Kosovo's Strategic Framework for Digitalization  _____________________________________ 3

### Kosovo's Strategic Framework for Digitalization

### A. Kosovo’s Approach to Digital Transformation
- Kosovo adopted the Digital Agenda of Kosovo 2013–20 (DAK 2020) in 2013 to develop digital infrastructure, promote electronic content, and enhance citizens’ digital literacy.
- A 2015 government modernization project aimed to build a more advanced digital administration.
- In 2018 Kosovo secured US$ 20.7 million from the World Bank for the Kosovo Digital Economy (KODE) project, aimed at improving access to high-quality, high-speed broadband services.
- By March 2023, the last remaining non-connected village was linked to high-speed Internet (with speeds of up to 100Mbps), achieving one of the highest Internet coverages in Europe.
- Kosovo joined the Increasing Civic Engagement in the Digital Agenda (ICEDA) project, co-financed by the European Union and led by the Metamorphosis Foundation.
- The Digital Agenda of Kosovo 2030 (DAK 2030) sets an ambitious vision to turn Kosovo into a “gigabit society” and positions the country as a competitive digital economy through five strategic goals:
  - 1) establishing an advanced secure digital infrastructure;
  - 2) driving the digital transformation of businesses;
  - 3) enhancing the digitalization of public services;
  - 4) fostering a digitally skilled population and innovative R&D ecosystem;
  - 5) strengthening the cybersecurity framework.
- DAK 2030 targets:
  - full national 5G coverage;
  - gigabit connections to all households and businesses;
  - bring all key public services and medical records online;
  - attain 90 percent adoption of digital IDs among citizens;
  - reach 80 percent adoption of cloud computing, AI, and big data technologies among companies.
- The e-Government Strategy 2023–27 (adopted October 2023) is a cornerstone of DAK 2030, emphasizing interoperability among government agencies and digitalization of essential public services. It is complemented by the Public Administration Reform Strategy, the Administrative Burden Prevention and Reduction Program, and the Cyber Security Strategy.

### B. Enablers of Digitalization in Kosovo
- Internet access and coverage:
  - As of 2022, 99.8 percent of households had access to the Internet.
  - 100 percent of enterprises had broadband connectivity—27 percent of which is fiberoptic.
  - 99.5 percent of the population is covered by at least a 3G network.
  - 4G covers 94 percent and 5G covers 65 percent of the territory.
- Internet affordability and adoption:
  - Internet user costs: fixed broadband basket equals 2.3 percent of monthly GNI per capita; mobile cellular data basket equals 1.4 percent of monthly GNI per capita.
  - Network subscription rates: 24.5 percent of the population subscribe to fixed broadband; 88 percent of the population subscribe to mobile cellular data.
  - UNDP Digital Household Survey: 86 percent of respondents had access to Internet at work; 29 percent used free public wireless.
- Infrastructure quality:
  - Telecom of Kosovo faces capacity challenges limiting further progress.
  - Mobile Internet download speeds in Kosovo rank near the bottom among regional peers.
  - The Government is implementing the National ICT Strategy to enhance digital infrastructure.
- Digital skills and usage disparities:
  - Higher-income and more educated individuals engage in more productive online activities (education, business support); lower-income and less educated individuals primarily use the Internet for social communication and casual browsing.
  - Kosovo Agency of Statistics: only one-third of the population is familiar with downloading or installing software and copying or moving files on a computer; even fewer are proficient in basic office software.
  - The disparity highlights the need for targeted digital literacy initiatives.
- E-commerce and related constraints:
  - E-commerce remains nascent; during Covid-19 more companies experimented with e-commerce and banks introduced online banking.
  - All utilities offer online bill payment options.
  - 44 percent of individuals report not knowing online banking platforms.
  - Well-known e-commerce websites like Amazon, Aliexpress, and ASOS only ship limited goods to Kosovo.
  - Third-party and instant payment methods are currently unavailable in Kosovo.
  - Securing an official, top-level domain for Kosovo is expected to positively impact the economy, data traffic monitoring, and cybersecurity.
- Projects and initiatives:
  - KODE project (initiated 2019) extended fiber optic infrastructure to rural areas and aimed to connect schools and public institutions.

### C. GovTech Solutions to Modernize Fiscal Operations
- GovTech maturity and positioning:
  - Kosovo moved from group C (Medium, some focus on GovTech) to group B (High, significant focus on GovTech) in the World Bank’s GovTech Maturity Index.
  - Kosovo scored 63 (on a scale of 0 to 100) and ranked in the middle among Western Balkan peers.
  - Kosovo performs relatively better in the Public Service Delivery Index but needs to strengthen GovTech enablers (GovTech Enablers Index) and citizen engagement (Digital Citizen Engagement Index).
- Revenue administration (Tax Administration of Kosovo, TAK):
  - Mandatory e-filing and e-payment systems were introduced in 2022.
  - Since January 1, 2022, TAK only accepts electronic tax declarations; taxpayers with no Internet access can use computers in regional offices.
  - Taxes must be paid through commercial banks; funds are electronically transferred from the bank to the Treasury account, with payment details transmitted to TAK daily.
  - TAK developed a Taxpayer Portal for online tax declarations, payments, and personal information updates.
  - In the ISORA digitalization index Kosovo scored 55.6 out of 100.
  - ISORA peers: Albania 64.1, Bosnia and Herzegovina 55.1, Montenegro 31.8, Serbia 70.2.
  - End-2022: a tax IT modernization contract signed before Covid-19 was canceled; the current system needs improvements for advanced analytics and real-time tracking of tax compliance.
  - Absence of a data warehouse hampers effective data management and analytics for identifying tax evasion risks.
  - Constraints include insufficient funding and a limited IT workforce.
  - Recommended priorities:
    - step-by-step expansion of TAK functionalities to risk management, e-invoicing, and cash management;
    - enhance human resources capacity and secure investments;
    - consider adopting a Commercial Off-The-Shelf (COTS) solution to align with best practices and improve user-friendliness and transparency;
    - engage stakeholders in change management and ensure a cohesive implementation approach.
- Public Financial Management (PFM) systems landscape:
  - Multiple non-integrated systems support PFM processes:
    - Kosovo Financial Management Information System (KFMIS): FreeBalance application for budget execution; centralized; asset management module records assets above EUR 1,000; generally effective but needs multi-year commitments functionality.
    - Public Investment Program (PIP): IT system and SQL database capturing all investment projects; full project cycle functionality; supporting documents can be uploaded; information needs completion; cost-benefit and feasibility documents are largely missing; needs to be fully utilized as a planning tool.
    - Budget Development Management System (BDMS): custom-made since 2004, updated for three-year MTEF; used for budget planning primarily for recurrent expenditures; BOs submit budget requests via BDMS; Budget Department is working to link PIP and BDMS to KFMIS.
    - e-Procurement System: centralized and unified information system covering end-to-end procurement processes; mandatory for all Contracting Authorities; handles works, supply, and consultancy services; Treasury is working to link KFMIS with e-procurement to improve access to multi-annual contracts and automate invoice capturing in KFMIS.
  - Treasury Single Account (TSA) at the Central Bank of Kosovo (CBK) consolidates government cash balances and manages all budgetary flows related to central and local governments.
  - Tax and non-tax revenues are swept into the TSA daily without lag between collection and sweeping.
  - Government cash outflows from the TSA are reconciled daily via integration between KFMIS and the CBK payment system.
  - Current shortcomings:
    - information systems often operate in isolation;
    - invoice reporting is manual and unreliable, relying on monthly Excel submissions from Budget Organizations (BOs) to the Treasury Department;
    - lack of systematic recording of multi-annual contracts, creating a gap in budget planning and assessment of fiscal space and investment progress.
  - Reform actions in progress:
    - tender process—supported by the German development agency GIZ—for a new e-Procurement platform to be delivered in Fall 2025;
    - Treasury seeks to automate invoice capturing and link PIP, BDMS, and KFMIS for improved transparency and arrears control.

_Prepared by Carolina Bloch, Mariano Moszoro, Mona Wang, Frank van Brunschot, and Yasemin Hurcan (IMF Fiscal Affairs Department)._

### 14.      The comprehensive reengineering of business processes and the adoption of

### sipea2025006 - 14.      The comprehensive reengineering of business processes and the adoption of

### Digitalization of PFM and business process reengineering
- Priorities: adopting a "capture data only once" policy and establishing robust data governance to ensure data quality.
- Data integrity actions: cleaning the PIP data, implementing validation checks, and excluding non-compliant projects from the Medium-Term Expenditure Framework (MTEF) pipeline.
- Invoicing automation: requires long-term business process reengineering and embedding changes during the review of the Law on Public Financial Management and Accountability.
- E-signatures: once enabled in Kosovo, the Treasury can begin to eliminate paper-based processing, supported by an ongoing training program for all system users.

### Provision of Digital Public Services (e-Kosova and interoperability)
- e-Kosova history and usage:
  - Launched in 2021 as a national public service portal.
  - Nearly a million registered users.
  - Kosovo’s statistical agency: 14.1 percent of citizens used the Internet to access information related to public services; 5.3 percent submitted forms through e-government platforms.
  - Among 2021 UNDP Digital Household Survey respondents who used e-Kosova, most used it only during COVID for vaccination appointments; tax services were the second most used, but only 5 percent of the respondents declared having done it.
- Services and targets:
  - Platform offers 200 online services (to be expanded to 230 online services by end-2024), including emission of civil status documents, utility payments, property taxes, judiciary services, police clearances, and pension benefit administration.
  - Pilot of life event approach: reengineering childbirth-related services by clustering related services across institutions.
  - National System for Electronic Identification (eID) target: 90 percent of the population using digital identities by 2030.
- Interoperability and Government Gateway (GG):
  - GG launched in 2017; slow initial traction due to technological and coordination limitations.
  - Usage accelerated in the last 3 years: 50 central and local institutions and 48 information systems now connected.
  - Further integration of e-Kosova (service delivery) and GG (data exchange) is vital for streamlining processes and improving user experience.

### Social dividends: Social safety nets, education, and health

- Social Safety Nets: digital payments and MIS development
  - Social registry: approximately 600,000 beneficiaries included; inclusion facilitated via e-Kosova or through social workers.
  - Electronic payments implemented for pensions, disability benefits, and the Social Assistance Scheme (SAS); processed through the Kosovo Pension Savings Trust and other government bodies with funds transferred through the Treasury.
  - New social assistance payment system: supported by introducing basic accounts in private banks for SAS beneficiaries.
  - MIS investments: supported by the World Bank; as of May 2024, the pilot MIS for the SAS was partially developed; SRMS and SWIS had not yet been initiated.
  - Digital inclusion and data security issues: rural populations rely on cash due to limited banking access or digital literacy; application processes remain in-person; data protection and privacy are ongoing priorities.

- Education: digital learning and IT skills development
  - Kosovo Education Strategic Plan 2022–26 includes integrating digital technology as one of five pillars.
  - DAK 2030 objectives: include basic IT skills and advanced competencies (coding, data analysis, cybersecurity); ensure all schools have high-speed Internet and modern digital tools.
  - Current connectivity: all 750 and about 400 ancillary establishments are in some way connected to the Internet, but most have poor quality or partial coverage.
  - World Bank KODE Project: 100 schools connected to high-speed Internet; follow-up project to extend high-speed Internet to 120 additional schools by the end of 2024.
  - DAK 2030: fourth strategic objective to create a "digital skilled population and innovative R&D ecosystem" supported by five specific objectives and 19 indicative activities.
  - Initiatives: free online training for e-commerce and e-government, revision of ICT programs, projects to increase women's inclusion in ICT, vocational IT professional practice programs, scholarships encouraging female students into STEM.

- Health: integrating information systems and planned investments
  - Fragmentation and limited BHIS coverage:
    - Basic Health Information System (BHIS) has limited functionality and needs uniform implementation.
    - World Bank (2024): as of March 2024, only a third of PHC facilities were estimated to have a fully functional BHIS, with less than 12 percent of visits registered in the system.
    - Only a few systems communicate with BHIS (e.g., public health surveillance system and pharmaceutical stock management system).
    - 475 health ambulatories remain to be connected to the BHIS.
  - Connectivity and targets:
    - All 38 large primary and ca. 60 percent of district (medium-size) healthcare centers are connected to the BHIS.
    - Target: integrated health information system based on Gigabit connectivity, generalized access to e-records by citizens by 2030.
  - World Bank KOMPAS project: roll out the IHIS, expand BHIS functionalities (including e-referrals and appointments), introduce a Hospital Management Information System for all regional hospitals, and improve data analytics at the National Institute of Public Health via a central data warehouse.

### Governance, institutional capacity, and cybersecurity
- Coordination and interoperability:
  - Ministry of Interior responsible for developing interoperability frameworks and data governance policies; empowering the AIS provides an opportunity to reevaluate core ICT systems.
  - Need to develop a comprehensive National Interoperability Framework and national interoperability standards aligned with e-Government Strategy 2023–2027 and the European Interoperability Framework.
  - Entrust DTU and AIS with clear mandate and resources to implement National Interoperability Framework.
  - Securing a top-level domain for Kosovo remains a priority to positively impact the economy, improve data traffic monitoring, and enhance cybersecurity.
- Cybersecurity capacity gaps and strategy:
  - Only a few key agencies have adopted effective practices after identifying cyber threats.
  - National cyber-incident response unit suffers from severe personnel shortages and low incident report volumes.
  - National Cyber Security Strategy (2023–2027): includes creating a cybersecurity agency and enhancing cyber incident response capabilities; aligns with e-Government Strategy and DAK 2030.
  - Recommendations: regular cybersecurity assessments and training programs for public servants.
- International and private-sector collaboration:
  - World Bank, European Union, USAID, IMF, UNICEF, Horizon Europe participation: support modernizing digital infrastructure, enhancing data management, capacity building, and aligning with EU regulations and best practices.
  - IMF support: designing a data warehouse for TAK and assessing readiness of PFM systems for digital invoicing processes.
  - Private sector partnerships: local IT firms, public-private partnerships for digital infrastructure expansion, hackathons, and innovation challenges to foster entrepreneurial ecosystem and R&D.

### Conclusions and policy recommendations
- Key observations:
  - Substantial progress in reshaping fiscal operations and service delivery via e-Government Strategy 2023–2027.
  - Remaining challenges: digital usage deficits, poorly coordinated development, outdated and fragmented platforms, manual operational processes, and cybersecurity risks.
- Priority policy actions (as stated):
  - Invest in underserved areas:
    - KODE project has expanded access to high-speed broadband in rural areas.
    - Government and World Bank collaboration to assess Internet penetration and service quality metrics; regularly monitor connectivity indicators.
  - Ensure a coordinated approach to digital transformation:
    - Implement a “whole-of-government” interoperability approach.
    - Entrust DTU and AIS with clear mandate and resources; implement the National Interoperability Framework.
    - Secure a top-level domain for Kosovo.
  - Modernize tax and PFM systems:
    - Develop e-filing and e-payment systems; address outdated technology and lack of a data warehouse.
    - Streamline business processes and resolve data integrity and isolation in PFM systems.
  - Establish robust cybersecurity measures and protocols:
    - Implement National Cybersecurity Strategy measures; conduct regular cybersecurity assessments and training.
  - Implement targeted digital literacy programs:
    - Launch initiatives to boost digital skills, especially for vulnerable groups; expand digital training and vocational IT programs aligned with labor market needs.
  - Consider Internet subsidies to increase mobile subscription rates:
    - Assuming a price elasticity of minus 1, increasing the mobile data subscription rate from 88 to 100 percent would require targeted subsidies equal to 0.02 percent of GDP.
    - Subsidy design options: supply-side (carriers and operators) or demand-side (users), through direct transfers or indirect benefits (lower fees and taxes).
    - Calculation provided in source: Mobile data targeted subsidies = (1 − .88) x (1 − .88)/.88 x .014 GNI/(−1) = .00023 GNI; using average GNP/GDP ratio for the past 15 years equal to 1.019 yields targeted subsidies equal to 0.02 percent of GDP.
  - Trace and publish KPIs:
    - Select and regularly publish KPIs to evaluate the effectiveness, progress, and impact of digitalization initiatives.

*Source: sipea2025006 - chapter content on Kosovo digital transformation and PFM (PDF).*

### References

### sipea2025006 - References

### Key sources on GovTech, digital adoption, and public finance
- Amaglobeli, D., R. de Mooij, A. Mengistu, M. Moszoro, et al. 2023. "Transforming Public Finance through GovTech." Staff Discussion Note SDN2023/004. International Monetary Fund, Washington D.C. https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2023/09/06/Transforming-Public-Finance-Through-GovTech-535765
- Kumar, U., D. Amaglobeli, and M. Moszoro. 2023. “Determinants and Social Dividends of Digital Adoption.” IMF Working Paper 2023/065, International Monetary Fund, Washington, DC. https://www.imf.org/en/Publications/WP/Issues/2023/03/17/Determinants-and-Social-Dividends-of-Digital-Adoption-531083
- Nose, M. and A. Mengistu. 2023. "Exploring the Adoption of Selected Digital Technologies in Tax Administration: A Cross-Country Perspective." IMF Notes 2023/008, International Monetary Fund, Washington, DC. https://www.imf.org/en/Publications/IMF-Notes/Issues/2023/12/11/Exploring-the-Adoption-of  -Selected-Digital-Technologies-in -Tax-Administration-A-Cross-541094
- Wang, L. X., and C. Bloch. 2023. “Digital Interventions in the Health Sector—Country Cases and Policy Discussions.” IMF Notes 2023/023, International Monetary Fund, Washington, DC. https://www.imf.org/en/Publications/IMF-Notes/Issues/2023/10/30/Digital-Interventions-in -the-Health-Sector-Country-Cases-and-Policy-Discussions-537567

### Kosovo-specific government and statistical sources
- Digital Agenda of Kosovo 2030 (DAK 2030). 2023. Kosovo Ministry of Economy, Pristina, Kosovo. https://opendatakosovo.org/wp-content/uploads/2021/12/Kosovo-DAO-2021.pdf
- Kosovo Statistical Agency. 2023. “Statistical Data.” https://askdata.rks-gov.net/pxweb/en/ASKdata/
- Kosovo Government. 2023. “E-Government Strategy Kosovo 2023–2027.” https://mpb.rks-gov.net/Uploads/Documents/Pdf/EN/2700/e-Government%20Strategy%20Kosovo%202023-2027.pdf
- Kosovo Agency of Electronic and Postal Communications. 2023. “Telecommunications Sector in Kosovo.” https://kiesa.rks-gov.net/page.aspx?id=2,34
- National Interoperability Framework Observatory. 2024. “Kosovo—2024 Digital Public Administration Factsheet—Main developments in digital public administrations and interoperability”. https://joinup.ec.europa.eu/sites/default/files/inline-files/NIFO_2024%20Supporting%20Document_Kosovo_vFinal_rev.pdf
- UNDP. 2023. “Digital Household Survey.” United Nations Development Programme. https://www.undp.org/kosovo/digital

### IMF and World Bank country and sector reports relevant to Kosovo
- Flynn, S. A. Verma, and K. McDonald, 2022. ”Republic of Kosovo—Strengthening Arrears and Multi-annual Contractual Commitment Recording,” IMF FAD TA Report.
- Stone, M., S. De Clerck, Y. Hurcan, T. Chaponda, W. Du Preez, and T. Ekeli. December 2023 “Republic of Kosovo: Public Investment Management Assessment Update and Climate PIMA.” Country Report No. 2023/019, International Monetary Fund, Washington DC. https://www.imf.org/en/Publications/CR/Issues/2023/12/04/Republic-of  -Kosovo-Technical-Assistance-Report-Public-Investment-Management-Assessment-541925
- World Bank. 2022. “Enhancing the Quality and Scope of Taxpayer Registration (EQSTR) Project.”
- World Bank. 2023a. “Kosovo Digital Economy (KODE) Project.” Project Appraisal Document. Washington, DC.
- World Bank. 2023b. “Strengthening the Enabling Environment for Digital Governance of Public Service Delivery.” https://documents.worldbank.org/en/publication/documents-reports/documentdetail/171601583756931326/strengthening-the-enabling-environment-for-digital-governance-of-public-service-delivery
- World Bank. 2023c. “World Bank and Kosovo Sign Agreement to Support Digital Governance for Service Delivery.” https://www.worldbank.org/en/news/press-release/2023/09/28/world-bank-and-kosovo-sign-agreement-to -support-digital-governance-for-service-delivery
- World Bank. 2024. “Kosovo—Comprehensive Approach to Health System Strengthening Project.” Washington, D.C. http://documents.worldbank.org/curated/en/099041824104539871/BOSIB1865412490411afb3122b52ffc74f8

### Academic, working papers, and sector studies on technology and productivity
- Doucek, P., 2009. ICT human capital—Research and development work in ICT. IDIMT-2009 System and Humans–A Complex Relationship, pp. 83−94.
- Kobilov, B. 2024 “Technology-Enabled Enforcement”. Working paper, Harvard Business School, Cambridge, Massachusetts. https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=NEUDC2023&paper_id=510
- Nguimkeu, P. and C. Okou. 2024. "Can Mobile Technologies Usage Enhance Productivity? A   Structural Model and Evidence from Food Suppliers in Benin". IMF Working Paper No. 2024/163. https://www.imf.org/en/Publications/WP/Issues/2024/07/26/Can-Mobile-Technologies-Enhance-Productivity-A-Structural-Model-and-Evidence-from-Benin-552512
- OECD. 2024. “Competitiveness and Private Sector: Western Balkans Competitiveness Outlook 2024.” Paris: Organisation for Economic Co-operation and Development. https://www.oecd.org/en/publications/western-balkans-competitiveness-outlook-2024-regional-profile_170b0e53-en.html
- Stone, M., et al. (see IMF Country Report No. 2023/019 entry above) — public investment and climate PIMA.

### Development partner case studies and program notes
- USAID. 2022a. “Tax Administration of Kosovo’s Digital Solutions Improve the Taxpayer Experience.” https://www.usaid.gov/kosovo/news/jul-11-2022-tax-administration-kosovos-digital-solutions-improve-taxpayer-experience
- USAID. 2022b. “Transforming Tax Administration in Kosovo: A Success Story.” https://www.usaid.gov/kosovo/news/transforming-tax-administration-kosovo-success-story

*References as listed in sipea2025006 - References*

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_Source: https://www.imf.org/-/media/files/publications/selected-issues-papers/2025/english/sipea2025006.pdf_