Cabinet passes 2020 state budget with 2.1 trillion MNT deficit
- By Dulguun Bayarsaikhan -
- Sep 26,2019
Minister of Finance Ch.Khurelbaatar presented the draft 2020 state budget, passed by Cabinet on September 25. The bill now awaits approval from Parliament.
Key points in the draft state budget include raising the structural revenue of the fiscal budget by 2.1 trillion MNT year-over-year to 11.8 trillion MNT in 2020 and maintaining deficit at 2.1 trillion MNT, or 5.1 percent of GDP. State expenditure is expected to approximate to 13.9 trillion MNT, up by 2.3 trillion MNT compared to 2019.
The government plans to maintain fiscal stability in 2020 while increasing fiscal efficiency under the “Digital, Transparent and Efficient” fiscal strategy. Within this scope, it hopes to shrink fiscal deficit and debt burdens. However, Cabinet has projected 20 billion MNT for the upcoming parliamentary election and another 10 billion MNT for provincial elections in the 2020 state budget.
The draft 2020 state budget stipulates the following measures for improving economic, business and investment environment, boosting trade turnover, and ensuring tax transparency.
- As part of tax reforms, the tax burden of taxpayers and business entities will be reduced, simplified tax regime will be adopted, tax registration, reporting and payment will be fully digitized and the frequency of tax reporting will be decreased, while VAT refunds will be issued on a quarterly basis. Measures aimed to enhance public knowledge about the tax system and relevant laws will be increased next year.
- Under customs reform, comprehensive redevelopment of Altanbulag, Zamiin-Uud, and Bichigt border checkpoints will be completed and renewal of Bichigt and Borshoo border checkpoints will commence.
For the educations sector, Cabinet decided to have the technical Vocational Education Training Center will double the 100,000 MNT stipends for students, which started this year, in an effort to encourage young people to study high-demand professions. For the first time in seven years, Cabinet is also proposing to increase spending on kindergarten lunches, Lunch Program and dormitory food supply by 50 percent. The monthly average wage of teachers will be raised to 1.5 million MNT in 2020, according to the draft bill.
Citing the draft bill, Minister Ch.Khurelbaatar stated that herders and the self-employed will be able to pay reimburse pension insurance fees they failed to pay since 1995 in one installment next year. Men and women who had their pension determined at a discounted rate will also get the chance to increase their pensions. He added that the number of years women paid social insurance will be extended depending on the number of children she gave birth to when she retires. For example, a mother of four children will get extra six years calculated for the number of years she worked.
He shared Cabinet’s intentions to complete ongoing projects and jumpstart delayed projects with investment from the state budget next year.
Cabinet will take regulatory measures to ensure the repayment of a total of 2.9 billion USD foreign loans with high interest rates between 2021 and 2024 doesn’t strain the state budget or economy, according to Ch.Khurelbaatar.
Another 5.3 billion MNT has been projected for Healthy Teeth Program, 20 billion MNT for Olympic Games, 9.6 billion MNT to Children’s Games, 10 billion MNT for Film Art Support Fund, 54 billion MNT for compensation to victims of political persecution, 15 billion MNT for the development of a Darkhan Industrial Park, 137 billion MNT for air pollution reduction, 55 billion MNT for state road fund, five billion MNT for Khargia Sewage Treatment Plant development, 1.3 billion MNT for anti-drug activities, and 4.8 billion MNT will be used to finance the Ecology Police Department against environment crimes.