Mongolia’s Deputy Speaker B. Purevdorj and MPs Ch. Lodoisambuu, A. Undraa, and G. Uyankhishig proposed a bill on 13 January 2025 to reduce the VAT rate to 5%.
This bill was first submitted in 2019 but was returned as it was not reviewed. The new parliament members have since reintroduced it.
This follows after Mongolia’s Prime Minister L. Oyun-Erdene announced various tax plans to ease the tax burdens on citizens, including the proposal to lower VAT to 5%.
Currently, citizens pay a 10% VAT but receive a 2% refund. Under the proposed law, the VAT rate would drop to 5% while maintaining the same 2% refund, reducing the net tax burden to 3%.
Mongolia has 180,000 registered businesses, 81,000 of which are VAT payers. There are also 250,000 registered individual entrepreneurs, 50,000 of whom pay VAT.
