Mongolia's Mining Windfall Tax to be discussed

Moninfo reports: The Standing Committee on Budget which decided to consider a draft law on making amendments to the windfall profit tax has delayed discussions for a week, but still plans to discuss it based on falling gold sales to the Mongol Bank, according to the committee secretary.

B. Batjargal, head of the Budget Regulatory Coordination Department at the Ministry of Finance said, “MPs of the standing committee on budget decided that it is good idea to discuss the amendments to the windfall profit tax law after looking at a performance report of the taxes that gold mining companies have paid since the windfall tax.”

A draft law submitted to the Speaker of Parliament on November 13 calls for the 68 percent windfall profits tax gold price threshold to be raised from US $500 to $650 amid falling gold sales to the Mongol Bank, officials said.

“The Ministry of Trade and Industry does not support the windfall profit tax law. We supported the idea of increasing the threshold price of gold, in other words US $650, for a 68% tax on sales of gold,” B. Nergui, Deputy Director of Geology, Mining and Heavy Industry told MonInfo Thursday.

The windfall profits tax, passed last May, calls for a 68 percent tax on sales of gold when the world prices rise above US $500 per ounce and $2600 per tonne of copper.

“We believe that it is correct to make amendments to the windfall profits tax law because we believe the price of gold will remain stable on the international market for the next year,” said Nergui.

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