A series of discussions under the theme "Current State of the Tax System of Mongolia and Required Changes" are being jointly organized by the Standing Committee on Budget of the State Great Khural (Parliament) of Mongolia and the Working Group in charge of reviewing the implementation of tax laws, issuing conclusions on the implementation, and if necessary, developing relevant draft laws.

The first discussion was held on January 28, 2025, on the topic of the “Implementation of the Law on Corporate Income Tax” at the State Palace of Mongolia. Head of the Working Group, Member of Parliament Gankhuyag Khassuuri noted, “The revised Law on Tax took effect in 2020. Although, for example, the revised Corporate Income Tax Law has established a simplified tax system, taxpayers complain that some regulations are still inconvenient, burdensome, and ineffective."

At the discussion, Deputy Head of the General Tax Department Myagmarjav Regzen and Specialist of the Tax Policy Department of the Ministry of Finance B. Enkhjin made presentations on the topic of “Implementation of the Law on Corporate Income Tax, Current Situation, and Future Measures.” In his presentation, Deputy Head of the General Tax Department Myagmarjav noted that the tax package law has been implemented since 1992 and that the tax rate and amount have changed substantially with each amendment to the law, depending on the level of sales revenue and taxable income. "The average corporate income tax is 21.2 percent internationally. In Mongolia, according to the tax laws in effect today, with the simplified tax formula, in other words, businesses with sales revenue of up to MNT 50 million are paying 1 percent tax on their sales revenue without deduction and exemptions. However, companies with sales revenue of MNT 3-6 billion are taxed at a rate of 10 percent, while companies with revenue over MNT 6 billion pay 25 percent tax" noted Mr. Myagmarjav.

"As of 2023, the average tax burden for businesses is 10.1 percent, according to a survey covering more than 158 thousand enterprises. In other words, enterprises are paying this percentage of their income in taxes," highlighted Specialist at the Tax Policy Department of the Ministry of Finance B. Enkhjin. She further noted that micro, small, and medium-sized enterprises have a tax burden of 5-6 percent, and large enterprises have a tax burden of 12.8 percent. By sector, mining has a tax burden of 19.2 percent, trade or 36.4 percent of all enterprises has a tax burden of 7.3 percent, food and agriculture has a tax burden of 4.3 percent, construction has a tax burden of 5.3 percent, and electricity has a tax burden of 4.3 percent.

The participants of the discussion suggested that when implementing tax reform, it is necessary to encourage the operation of enterprises, pay attention to human resource issues, and implement policies aimed at ensuring the principle of equal and fair taxation. They also put proposals that the legal environment of the insurance sector should be renewed since tax legislation has regulations related to the insurance sector, pay attention to the conditions under the current law that small taxpayers could hide their income, find optimal solutions to expand taxpayers, and flexible tax policies and regulations are implemented for national producers. The discussions are temporarily adjourned.