Tax Spending and Equal Application of Laws

2023-05-16 16:49:57

Ulaanbaatar, May 16, 2023 /MONTSAME/. "Taxpayers' Days," which is held on the second week of May every year, was celebrated for the 25th year last week.

Equal participation of citizens and enterprises in tax relations and equal application of legislation were focused on during the "Taxpayers' Days." From this point of view, starting from this year the tax organization has applied a 4-level evaluation to calculate the extent to which taxpayers comply with legislation and conduct responsible activities.

Another feature of this year's "Taxpayers' Days" was the issue of tax spending. Head of the General Department of Taxation B. Zayabal mentioned the implementation of the Austerity Law and clarified that the beneficiaries of taxes, especially government and administrative organizations, are moving to the mechanism of saving tax expenditures and reporting this to the public. He announced that the Ministry of Finance and the tax organizations will jointly deliver information on tax spending to citizens through the e-barimt system.

Tax spending and equal application of laws were discussed during the "Tax Days". The tax authorities use real estate tax as an example of unequal and unfair payment of taxes and unequal enforcement of tax laws. The rate and amount of tax payable in this respect are unequal depending on the date and location of the real estate registration.

The number of taxable real estate has increased by 20,000 in the last two years. Specifically, in 2020, 45.1 thousand real estate were registered for tax, while this number increased to 56.7 thousand in 2021 and 63.8 thousand in 2022 respectively. However, the number of real estate taxpayers was 33.1 thousand in 2020, while this number increased to 39.6 thousand in 2021 and 43.8 thousand last year.

By law, the minimum real estate tax rate is 0.6 percent and the maximum rate is 2 percent. In reality, the tax is charged at a maximum of 1 percent depending on the zoning. Real estate tax is the main source of revenue of local budgets.

Taxable property and the number of taxpayers are increasing year by year, but the tax rate amount has not changed in the last 10 years.

Taxes are levied on income, consumption, and assets owned by citizens, enterprises, and organizations. The State Department Store has paid MNT 84 million in real estate tax for the past 20 years, while Shangri-La Hotel has paid MNT 8.8 billion in real estate tax. Even though they operate in the same zone of the city, depending on the evaluation registered in the registration authority, they pay extremely different taxes, according to the General Department of Taxation.

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