We continue to introduce various Mongolian taxes to be aware of. The Law on Gasoline and Diesel Fuel Tax was adopted on June 2, 1995, yet only came into force on June 6, 1995.
According to this law, the tax is levied on all types of gasoline and diesel fuel whether produced within the territory of Mongolia, or imported into Mongolia. This tax is levied on every ton of fuel calculated as follows.
Gasoline up to 90 octane will be taxed at 20,350 MNT per ton, while gasoline with octane over 90 will be taxed at 25,700 per ton. Diesel fuel will be taxed at a substantially lower rate of 2,140 MNT per ton. This suggests the government recognizes the importance of diesel fuel in economic activities such as logistics and transportation of goods.
This tax is different and in addition to the tax levied on petroleum and diesel fuel in accordance with Law on Excise Tax. The purpose of the Excise Tax is to limit harm to the society or reduce the worst effect of the products as like as international standards. The excise tax on petroleum and diesel fuel is expected to be increased on July 1, 2017 and October 1, 2017 respectively.The tax on gasoline and diesel fuel produced on the territory of Mongolia is levied by the National tax offices and the tax on imported gasoline and diesel fuel is levied by the Customs offices in accordance with the amounts above.
Several changes to Mongolian taxes have been ratified recently by the Mongolian Parliament as a means to raise additional revenue in hopes of improving the state budget. The new implemented tax on gasoline and diesel fuel is primarily intended to raise revenue.