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News -
Economy
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Tuesday, 22 January 2008 04:30 |
Imported wheat will be released from VAT until July 1, if the
government’s resolution is approved by parliament. The Standing
Committee of Budget supported it on December 18. The members realize
that the flour price is rising and the country does not have enough
reserve for this year’s need. Therefore, imported wheat should support
the needs of the flour plants until harvest time. The budget of the
resolution also projected that 40,000 tons of imported flour should be
released from VAT under the request of the local flour plants because
the local plants can’t support the flour need until Tsagaan Sar, the
Traditional Holiday (celebrated beginning February 5th, 2008). Members
agreed that 40,000 tons of flour should be imported by a clear
number through every border point, and the resolution should launch the
clear number. For example, a border point of the western aimag should
import 5000 tons of flour and 5001 tons should pay the VAT.
Members feel the parliament session will approve the resolution after the first discussion.
The draft of the resolution, which is Tg 51.6 billion, should be spent
from the Development Fund for setting up a reserve of flour and wheat.
The money will be spent for a reserve of 15 tons of flour and 100
thousand tons of wheat. According to the World Bank’s quarterly report,
Mongolia continues its rapid growth, but inflationary pressures have
emerged. The main causes for inflation are the international prices of
flour, wheat and petroleum. If the government doesn’t make any
regulation against the rising prices, the country will soon be faced
with a shortage of flour and flour products. Meat and flour are key
foods in the Mongolian diet.
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