Minister of Finance Khurelbaatar Chimed submitted the bill on 2019 State Budget to the Parliament for approval last Friday. The bill estimated budget balance to be MNT 1.9 trillion in deficit with MNT 9.7 trillion revenue and MNT 11.6 trillion expense. The deficit equals 5.2 percent of total GDP. The 2018 budget balance was estimated at MNT 2.4 trillion in deficit. The minister noted that next year’s budget revenue did not include two income sources from Stabilization fund and Future Heritage Fund. If added, the budget balance may total MNT 11.1 trillion in surplus for the first time. “In preparing the budget, we evaluated Mongolia’s economic growth to be 8 percent in 2019. The package bills on taxes were prepared this year and submitted to the Parliament. These taxes will take effect starting from January 1, 2019. We expect the new taxes will have significant impact in increasing economic activity, supporting the operations of small and medium enterprises and attracting foreign investors,” remarked Mr. Khurelbaatar. He added, “For instance, the corporate income tax will be 1 percent for entities with an annual revenue of less than MNT 1.5 billion. Private entities were previously required to submit four tax reports every year. They are now required to submit 1-4 reports depending on their income with the revision. Secondly, an extensive inspection involving over 10 government agencies was co-conducted in tavan tolgoi and border checkpoints. There were some cases were certain amount of coal that were being transported through Gashuunsukhait border checkpoint was lost due to lack of monitoring, as well as quality issues.

Ministry of Finance expects external debt to equal 55 percent of GDP in 2019
Therefore, the Government decided to allocate budget to create comprehensive system to improve monitoring, install x-ray equipment and cameras, which will be government by a single agency. Also starting from 2019, oil products that are being imported through four border checkpoints will be examined by cutting-edge technology. The budget included the necessary financing to install the equipment.” Within the frames of the package bills on taxes, customs databases are expected to be merged and will be commissioned in 2019. The Ministry of Finance expects the unified database will allow taxes to be fully collected and stop tax evasions. According to the budget bill, foreign loans and aids will account for MNT 1.3 trillion of the revenue and remaining will be built up from domestic sources. The ministry estimates the external debt to equal 55 percent of GDP, which is 26.2 percent lower than 2017. “We are increasing the number of projects to be implemented with foreign loans and aids. Prime Minister Khurelsukh Ukhnaa signed an agreement worth USD 350 million to increase the drinking water supply in Ulaanbaatar. Considering the cost of establishing a wastewater facility in Ulaanbaatar, the total expense on water will total USD 650 million. The amount of investment from the state budget totals MNT 1.36 trillion, which doubles the amount of this year,” informed Mr. Khurelsukh. Additionally, MNT 720 billion was allocated a for increasing salary, pension and welfare, while MNT 200 billion has been allocated for air pollution reduction in 2019 Budget.

Published Date:2018-10-01