(Ulaanbaatar) Jan 6, MPP group at State Great Khural made official announcement on the Budget 2015 Law discussions.
Although Government for Solution submitted the draft on Budget 2015 Law, there are apparently many issues that DP and MPP have differing stances.
MPP was against rasing the debt ceiling that was first things proposed by the Government for Solution. PM Ch,Saikhanbileg had drafted the change in debt ceiling to be raised to 70% of the GDP. MPP announced today that they are not supporting such proposal at all.
In 2013 Mongolian GDP was MNT 19,1 trillion, implying that the government debt is around MNT 10 trillion.
MP S.Byambatsogt emphasized that previous cabinet raised the debt ceiling to 55 percent jumping over lawful 40 percents. As he sees, Mongolia should not only seek and rely on more loans, but seek other financial sources such as attracting foreign investments and increasing revenues from exports. MPP stated that bond debt is the easiest of the possible ways to finance and is not supporting it in order to prevent the citizents from the debt burden.
To the reporter's question whether the MPP is being aware of the possible risks by not supporting the increase of the debt ceiling, MP S.Byambatsogt replied with: "One should come with the debt payment methods first. It will become a burden for our next generation if the state keeps borrowing without any proper plans. As of the bigger projects there are funds available from the Chinggis Bond."
MP B.Choijilsuren added that current leaders have annuled the Chalco deal to sell coking coal for USD 70 per tons, claiming that the market prices at that time were USD 80 per ton, which is now being traded at USD 224-36 per ton, reminding that are risks associated with rushed borrowings.
Also MPP members have reminded of the agreement made with DP before entering the Government for Solutions, that cabinet will not attempt to raise the debt ceiling. Reportes were quick to note that current Minister of Finance J.Erdenebat is member of MPP, to which MP S.Byambatsogt replied:"Government works as cabinet and one minister is just one part of it."
Cuts on children welfare money totals to MNT 95 billion
Moreover MP S.Byambatsogt hit hard on the proposed cut in the children welfare (MNY 20,000), as this act will be discriminatory towards children and it should not be discussed lightly. Cuts total up to MNT 95 billion from MNT 240 billion budgeted.
While he supported that student stipends (MNT 70,000) to be issued on a merit base and he also stated that MPP is against reducing the subsidies for mothers (MNT100,000-200,000 one time per annum) with four or more children, as there are over 200,000 mothers and 90 percent of them are under age of 55.
Residents with 1-2 real estate properties are to be expemt from taxes.
New taxes were introduced in the Budget for 2015, which are:
- Capital tax
- Vehicle tax
- Cattle tax
- Real Estate tax.
The draft law provisions residents owning 3 and more real estate properties are to be taxed with 3%, not current 2% under the local governing entities. Residents with 1-2 real estate properties are to be exempt from taxes.
Vehicle tax is to be doubled and the rights are transfered to the local governments as well as the cattle taxes, which are calculated to be around MNT 1000 per cattle. The later was opposed by the MPP harshly.
Capital city taxes are to be around 0-1 percent of the total amount of purchases. This for instance translates into increase of prices for single bread, having in background taxes added for the grain, processing at the mills and bakeries.
Moreover, lack of the specifics on spending of those accumulated funds have been hit with harsh critics, adding up to the stress of inflating the prices. MPP also mentioned that government haven't given any specifics of how much funds to be accumulated through those new taxes.
Also MPP sees the GDP growth provisioned at 7.1 percent as way too optimistic. According to MPP GDP growth for 2014 was at 6 % and will remain the same in 2015 as well.
The opposition does not welcome the increased tax policy as it is not the best way to support already crawling private sector, while suggesting to increase taxes on luxury items, alcoholic beverages and vehicles with more than 3000cc.
(Ulaanbaatar) Jan 6, MPP group at State Great Khural made official announcement on the Budget 2015 Law discussions.
Although Government for Solution submitted the draft on Budget 2015 Law, there are apparently many issues that DP and MPP have differing stances.
MPP was against rasing the debt ceiling that was first things proposed by the Government for Solution. PM Ch,Saikhanbileg had drafted the change in debt ceiling to be raised to 70% of the GDP. MPP announced today that they are not supporting such proposal at all.
In 2013 Mongolian GDP was MNT 19,1 trillion, implying that the government debt is around MNT 10 trillion.
MP S.Byambatsogt emphasized that previous cabinet raised the debt ceiling to 55 percent jumping over lawful 40 percents. As he sees, Mongolia should not only seek and rely on more loans, but seek other financial sources such as attracting foreign investments and increasing revenues from exports. MPP stated that bond debt is the easiest of the possible ways to finance and is not supporting it in order to prevent the citizents from the debt burden.
To the reporter's question whether the MPP is being aware of the possible risks by not supporting the increase of the debt ceiling, MP S.Byambatsogt replied with: "One should come with the debt payment methods first. It will become a burden for our next generation if the state keeps borrowing without any proper plans. As of the bigger projects there are funds available from the Chinggis Bond."
MP B.Choijilsuren added that current leaders have annuled the Chalco deal to sell coking coal for USD 70 per tons, claiming that the market prices at that time were USD 80 per ton, which is now being traded at USD 224-36 per ton, reminding that are risks associated with rushed borrowings.
Also MPP members have reminded of the agreement made with DP before entering the Government for Solutions, that cabinet will not attempt to raise the debt ceiling. Reportes were quick to note that current Minister of Finance J.Erdenebat is member of MPP, to which MP S.Byambatsogt replied:"Government works as cabinet and one minister is just one part of it."
Cuts on children welfare money totals to MNT 95 billion
Moreover MP S.Byambatsogt hit hard on the proposed cut in the children welfare (MNY 20,000), as this act will be discriminatory towards children and it should not be discussed lightly. Cuts total up to MNT 95 billion from MNT 240 billion budgeted.
While he supported that student stipends (MNT 70,000) to be issued on a merit base and he also stated that MPP is against reducing the subsidies for mothers (MNT100,000-200,000 one time per annum) with four or more children, as there are over 200,000 mothers and 90 percent of them are under age of 55.
Residents with 1-2 real estate properties are to be expemt from taxes.
New taxes were introduced in the Budget for 2015, which are:
- Capital tax
- Vehicle tax
- Cattle tax
- Real Estate tax.
The draft law provisions residents owning 3 and more real estate properties are to be taxed with 3%, not current 2% under the local governing entities. Residents with 1-2 real estate properties are to be exempt from taxes.
Vehicle tax is to be doubled and the rights are transfered to the local governments as well as the cattle taxes, which are calculated to be around MNT 1000 per cattle. The later was opposed by the MPP harshly.
Capital city taxes are to be around 0-1 percent of the total amount of purchases. This for instance translates into increase of prices for single bread, having in background taxes added for the grain, processing at the mills and bakeries.
Moreover, lack of the specifics on spending of those accumulated funds have been hit with harsh critics, adding up to the stress of inflating the prices. MPP also mentioned that government haven't given any specifics of how much funds to be accumulated through those new taxes.
Also MPP sees the GDP growth provisioned at 7.1 percent as way too optimistic. According to MPP GDP growth for 2014 was at 6 % and will remain the same in 2015 as well.
The opposition does not welcome the increased tax policy as it is not the best way to support already crawling private sector, while suggesting to increase taxes on luxury items, alcoholic beverages and vehicles with more than 3000cc.