IMF Says Mongolia Tax Rates Low
Tax rates in Mongolia are low, compared to rates in developing countries. To some extent, it is so low that almost equals to tax rates in offshore zones. A personal income tax rate of 10% is at the same level as that in the countries of the Middle East” said International Monetary Fund resident representative for Mongolia, Neil Saker.
He was responding to a question on whether the Mongolian government’s action to raise rates of six types of tax and contribution of social insurance to meet IMF requirements for getting $440 million of loan shrink the economy even more and put pressure on the private sector, the Mongolian news agency Montsame reported.
The Business Council of Mongolia held its first meeting of 2017 on March 13 and one of the topics discussed at the meeting was implication of IMF’s Extended Fund Facility Program on the Mongolian economy.
Deputy governor of the Bank of Mongolia B. Lhagvasuren noted that previous authorities had spent a huge amount of money or around $8 billion inefficiently for the last four years that caused the current difficulties. “We should demand and express our position incessantly, as governments hear the citizens’ voice in times of economic difficulties” said economist D. Jargalsaikhan.
The government decided not to raise salaries till 2019. Certainly, this is not good news for public employees. However, inflation is at a relatively low level and this tendency is expected to continue in future. Therefore, the risks that real income of citizens could be lowered or devalued have been reduced, the meeting was told.