VAT Law implementation results in growth of government budget revenue

2017-01-20 14:19:10

Ulaanbaatar /MONTSAME/ The “Changemakers” club of economic journalists has organized a discussion on the implementation of the new Law on Value Added Tax. The event gathered some important figures, including the chairman of the General Department of Taxation, directors of public and private companies and university professors.

The VAT Law was adopted on July 8 of 2015 and entered into force on January 1 of 2016. Citizens were introduced to use of a new online system to register receipts of their each purchase as VAT payers and to receive 20 percent VAT return after completion of each fiscal year.

Chairman of the Taxation Department L.Zorig underlined that, with the implementation of the law for one year brought MNT 70 billion of increase from VAT charging to the country’s economy compared to that of 2015. To be specific, he added, the taxation department accumulated MNT 1.565,4 trillion to the Government Budget in 2017. Some 35 percent or MNT 555.2 billion were the revenue from VAT, which represents 70 percent increase against the previous year.

As of today, there are 63,183 registered VAT set-off paying companies. In the past year, 169,473 users of online “ebarimt” system out of the total 621,538 users won the VAT lottery. The annual VAT return of MNT 35 billion will be distributed to more than 620 thousand citizens. A half of the return has been planned to be allocated to each individual accounts before the lunar new year. However, the procedure has been facing some difficulties due to missing information from over 140 thousand VAT payers, according to the related officials.

The law implementation enabled the government to better monitor the companies’ sales revenues and helped shrink the shadow economy, considers Prof. D.Dalkhjav, Dean of Economy and Business School of the University of Agriculture.