Excise taxes on vehicle, alcoholic products and tobacco as well as social insurance premium and personal income tax will be increased starting 1st of April, 2017 in accordance with the Staff-Level Agreement between Mongolia and International Monetary Fund on Three-Year Extended Fund Facility.
Vehicle excise duty will be increased by 3-15 percent depending on the engine capacity and aging.
Excise taxes rates on alcoholic products and tobacco will be added by 10 percent by 2018, 5 percent by 2019 and 5 percent by 2020. Customs tax on imported tobacco is now at 5 percent. Minister of Finance noted that the custom tax on tobacco is lower than limits set by the World Trade Organization and it shall be increased up to 30 percent.
Interest income on personal savings accounts will be taxed from 1st of April, 2017. However it is unclear that whether the taxes will be imposed on all taxpayers or owners of savings more than MNT 100 million.
In addition, social insurance premium rate will be risen by 2 percent by 2018, 1 percent by 2019 and 2 percent by 2020. Currently employee pay 10 percent and employer pay an average of 11 percent monthly for social insurance premium. Thus the rate will be increased to 12 percent next year.
Moreover IMF demanded to increase personal income tax rate by 10, 15, 20 percent depending on the amount of salary. Currently individuals pay 10 percent of PIT in Mongolia. However its effective date is unclear.
During the negitiations with the IMF, authorities discussed whether to increase value added tax (VAT) rate. However it has decided not to add the VAT.
Excise taxes on vehicle, alcoholic products and tobacco as well as social insurance premium and personal income tax will be increased starting 1st of April, 2017 in accordance with the Staff-Level Agreement between Mongolia and International Monetary Fund on Three-Year Extended Fund Facility.
Vehicle excise duty will be increased by 3-15 percent depending on the engine capacity and aging.
Excise taxes rates on alcoholic products and tobacco will be added by 10 percent by 2018, 5 percent by 2019 and 5 percent by 2020. Customs tax on imported tobacco is now at 5 percent. Minister of Finance noted that the custom tax on tobacco is lower than limits set by the World Trade Organization and it shall be increased up to 30 percent.
Interest income on personal savings accounts will be taxed from 1st of April, 2017. However it is unclear that whether the taxes will be imposed on all taxpayers or owners of savings more than MNT 100 million.
In addition, social insurance premium rate will be risen by 2 percent by 2018, 1 percent by 2019 and 2 percent by 2020. Currently employee pay 10 percent and employer pay an average of 11 percent monthly for social insurance premium. Thus the rate will be increased to 12 percent next year.
Moreover IMF demanded to increase personal income tax rate by 10, 15, 20 percent depending on the amount of salary. Currently individuals pay 10 percent of PIT in Mongolia. However its effective date is unclear.
During the negitiations with the IMF, authorities discussed whether to increase value added tax (VAT) rate. However it has decided not to add the VAT.