Proposed Amendments to Mongolia’s VAT Law: Key Changes and Public Feedback Process www.vatupdate.com

The Mongolian Ministry of Finance has drafted reforms to the Value Added Tax (VAT) Law, alongside amendments to the General Tax Law, Corporate Income Tax Law, and Personal Income Tax Law, as part of the Government’s 2024-2028 Action Plan, with public comments accepted until April 12, 2025, and implementation set for January 1, 2026. Key VAT changes include a progressive refund incentive for individuals on purchases, a new threshold requiring local entities with sales revenue exceeding MNT 400 million in 12 months to register as VAT payers, and expanded VAT deductions. Deductible input VAT now covers capital expenditures, services received in Mongolia, purchases assumed to include 10% VAT from third parties, passenger cars, and business-related events, training, and personal use within Corporate Income Tax Law limits. The drafts, published on the Ministry’s website, will be refined with public input before submission to the Government and Parliament for approval.
Source: pwc.com

ION Announces US$13.5M Joint Venture on Urgakh Naran, Corporate Updates and Update on Rare Earths Transaction www.stocktitan.net

300 MW Combined Heat and Power Plant to Be Built in Bayangol District www.montsame.mn

As part of the 24 mega projects to develop Ulaanbaatar City, a new Combined Heat and Power (CHP) Plant No. 5 with an installed capacity to produce 300 MW of electricity and 340 Gcal/h of heat will be constructed in the 20th khoroo of Bayangol District, Ulaanbaatar City.
The plant will be designed as an environmentally friendly facility that resolves land, coal, and water supply needs all in one place. The preliminary general layout plan of CHP-5 includes the main plant, administrative building, electrical substation, coal unloading area, ash storage, and loading facilities, as well as space for future expansion.
According to the Media and Public Relations Department of the Governor's Office of the Capital City, CHP-5 will not only supply heat to Tavan Shar, 21st khoroolol, Khilchin residential area, Bayankhoshuu, and the 3rd, 4th, and 1st khoroolols, but will also reduce the Ulaanbaatar City's reliance on imported electricity.

Mongolia receives highest number of Chinese tourists in 2024 www.xinhuanet.com

Mongolia received the highest number of Chinese tourists in 2024, with a total of 221,250 visitors, according to official data released by the Mongolian Tourism Organization on Thursday.
The Chinese tourists accounted for 30.4 percent of the total international tourist arrivals to Mongolia, the report said, adding that the landlocked Asian country attracted a total of 727,400 foreign visitors at the end of 2024, up 11.9 percent from the 650,000 international guests in the same period of last year.
According to experts, Chinese tourists continue to make a significant contribution to the development of Mongolia's tourism sector.
China has become one of the biggest sources of foreign tourists to Mongolia in 2024, leaving behind Russia and South Korea, according to the report.
Currently, Mongolia's economy relies most heavily on the export of mineral resources. Tourism promotion is considered one of the priorities for diversifying the country's economy and increasing the competitiveness of its tourism in the context of global competition.
According to Mongolian Prime Minister Luvsannamsrai Oyun-Erdene, the Mongolian government has decided to continue the "Years to Visit Mongolia" tourism program until 2028 to promote the development of four-season tourism in the country.
By 2028, Mongolia plans to receive a total of 2 million foreign tourists as part of its policy to support the tourism sector under the official motto "Go Mongolia," he added.

IFRC and CIDCA launch first joint project in Asia to strengthen climate resilience in Mongolia www.ifrc.org

Mongolia to Launch the "Atar-IV" Campaign www.montsame.mn

During its regular session on March 26, 2025, the Cabinet of Mongolia decided to implement the "Atar IV" Campaign.
Chief of the Cabinet Secretariat of Mongolia Uchral Nyam-Osor noted, “In line with this decision, Prime Minister of Mongolia Oyun-Erdene Luvsannamrai will work in agricultural regions and solve the problems facing the food and agricultural sectors on-site.”
Mongolia has successfully implemented three "Atar" Campaigns to reclaim virgin lands for crop production. The resolution to launch the first "Atar" Campaign was issued by the III Plenum of the Central Committee of the Mongolian People’s Revolutionary Party in March 1959, while the second campaign began in 1976.
The first Atar campaigns were organized by the Mongolian Revolutionary Youth League under the leadership of the Mongolian People’s Revolutionary Party (MPRP), involving young people in a wide range of activities, and working together with newly established state farms.
The "Atar" Campaigns benefited Mongolia in meeting its domestic food needs, such as flour and wheat, and also remarkably contributed to the development of industry and technology. The Government approved the “Atar III" Campaign by Resolution No. 70 of 2008. The main goals of the Campaign were to protect and restore soil fertility, intensify seed and technical innovation, and ensure sustainable development of import-substituting and export-oriented crop production.

Why Mongolia’s Debt Market Is Attracting Strong Investor Appetite www.thediplomat.com

In recent months, Mongolia has tapped into its financial market, aiming to boost investor confidence and attract funding from diverse sources. Mongolia's debt market has witnessed a surge in investor interest, which can reflect growing confidence in the country's economic trajectory.

In 2024, Mongolia experienced a strong capital inflow - raising more than $1.2 billion - which can be attributed not only to the country's economic recovery but also some structural changes. The International Monetary Fund Concluding Statement stressed that "[t]he adoption of a nominal debt ceiling of 60 percent of GDP is a major step forward in strengthening Mongolia's fiscal rules..." but warned that domestic policymakers need to be vigilant on emerging risks.

Mongolia's economy and investment environment require constant global engagement. While Mongolia's landlocked position limits its exposure, it is having new success attracting businesses and investments. Market participants are now speculating on another possible credit rating upgrade, further bolstering investor sentiment. Fitch Ratings upgraded Mongolia's sovereign credit rating from B- to B with a stable outlook in September 2024.

The Mongolian government recently issued $650 million sovereign bond, priced at the tightest spread in the country's history at 6.85 percent, which underscores the heightened demand. This milestone showcases Ulaanbaatar's ambition and goals to access international capital markets at increasingly favorable terms.
Last week, the Bank of Mongolia made another major decision to stimulate growth and curb inflation, while. According to the central bank, the newly passed monetary policies have three aims. First, it will increase the policy rate by 2 percentage points to 12 percent. Second, it will reset the upper limit of the debt service-to-income (DSTI) ratio to 50 percent for banks' newly issued and restructured consumer loans. Third, for loans secured by pension and benefit income, the borrower's remaining income after paying the monthly loan installments shall be no less than the minimum subsistence level.

Beyond sovereign debt, Mongolia's corporate bond market is also gaining momentum. In June 2024, Golomt Bank led the way with a successful $300 million bond issuance, later tapping an additional $100 million due to strong investor demand. This transaction set a crucial benchmark for other financial institutions considering international bond issuances. Following Golomt's lead, other Mongolian banks and corporations are evaluating similar capital-raising strategies to enhance liquidity and fund expansion.

Trade and Development Bank (TDB) became a trailblazer by issuing Mongolia's first international green and social bonds, signaling a growing commitment to sustainable capital raising. This move aligns with global investor demand for instruments that acknowledge the importance of environmental, social, and governance (ESG) factors and sets the stage for further ESG-related financial innovation in the country.

In Ulaanbaatar, the mayor's office also issued the country's first municipal bond, successfully raising $500 million. The subnational issuance will help to diversify Mongolia's debt instruments and strengthen investor confidence in municipal-level fiscal management. The funds raised will be directed toward critical infrastructure projects, including transportation, energy, and urban development, enhancing the capital city's long-term economic sustainability.

Despite these positive trends, there are notable challenges and risks. Geopolitics and disruption in financial markets can impact investment, the debt market, and fixed-income investments.

Global interest rate movements will also impact Mongolia's cost of capital. If other major central banks maintain high interest rates, emerging markets like Mongolia may face increased borrowing costs, potentially limiting future debt issuances.

On the domestic front, concerns are growing that the government's push to implement 14 mega-projects-largely dependent on state procurement could fuel inflation. Higher prices could erode real returns on fixed-income investments. In its March meeting, the Bank of Mongolia warned that "inflation is projected to remain above the Bank of Mongolia's target range throughout this year," adding, "If upcoming mega projects are financed through domestic sources, heightened pressures on the balance of payments and the exchange rate could further accelerate inflation.

Another key challenge is ensuring the sustainability of Mongolia's debt. The surge in the bond market comes with concerns about burdening future generations with excessive debt. While investor confidence is strong, the government must remain vigilant about maintaining fiscal discipline, avoiding excessive reliance on external borrowing, as well as tackling corruption and transparency.

For now, though, Mongolia's debt market looks promising, offering diverse options such as sovereign bonds, corporate debt, green financing, or municipal bonds. For investors seeking exposure to high-growth frontier markets with improving credit fundamentals, Mongolia presents a compelling case. The Mongolia Investment Forum, which will take place in New York in April, will seek to further capitalize on these positive trends in Mongolia's financial market.

By Bolor Lkhaajav and Zolbayar Enkhbaatar

Mongolia exports over 10 mln tons of coal in first 2 months of 2025 www.xinhuanet.com

Mongolia exported 10.2 million tons of coal worth 858.8 million U.S. dollars in the first two months of 2025, local media reported on Wednesday, citing official data released by the country's Ministry of Road and Transport.
The figure decreased by 35.7 percent in terms of value and 3.4 times in physical volume compared to the same period last year, the data showed.
The mining sector remains one of the main pillars of the Mongolian economy, as the country is rich in natural resources such as gold, silver, copper and coal.
A significant share of Mongolia's coal production is accounted for by the Tavan-Tolgoi coal deposit, which is one of the world's largest untapped coking and thermal coal deposits, located in the southern Mongolian province of Umnugovi. It has a total estimated resource of 6.5 billion tons, one-quarter of which is high-quality coking coal.

Mongolian MP alleges political interference in late-night detention of independent media company employees www.asianews.network

The Standing Committee on Justice convened to discuss the late-night detention and interrogation of “Noorog” content creators. During the session, MP Ch.Lodoisambuu voiced strong criticism of the police, alleging political interference.
“It is clear from the response of the head of the Police Legal Department that the state is manipulating the narrative. Only one person from ‘Noorog’ was detained, not three. So why are you providing misleading information about the three?” he questioned.
Ch.Lodoisambuu, speaking from his own experience as a journalist, claimed he was also detained for expressing his opinion. He recounted, “I wanted to see the video these young people created. Then their computers were confiscated. However, public outrage was so strong that the police didn’t anticipate how well-known ‘Noorog’ actually was.”
He accused the authorities of acting under political pressure. “The police tried to fulfill the orders of the Prime Minister’s family. Later, it turned out that one of the members was involved in online gambling. But what is the direction now? Minister of Justice O.Altangerel is distorting facts and attacking press freedom,” he asserted.
Ch.Lodoisambuu further criticized the long standing political practice of suppressing dissent. “This is nothing new. When Kh.Nyambaatar was Minister of Justice, he used to map out and plan detentions. That ‘tradition’ continued under Minister B.Enkhbayar. Will the current minister put an end to this? It’s been five days—why hasn’t the seized equipment been returned? How long does it take to copy files?”
He commended Chairman D.Tsogtbaatar for organizing the discussion, emphasizing the growing disconnect between the government and the people. “The leaders of this country don’t see beyond the Internet. They only perceive society as it appears online. And these are the people leading us.”
Ch.Lodoisambuu also raised concerns about corruption within law enforcement. “Who appoints the Chief of Police? The Parliament, based on the Prime Minister’s proposal, right? Just yesterday, a man went live, revealing that MNT 9 billion had been deposited into a single account. He claimed a police officer was receiving bribes of MNT 75 million per month. Such a massive case could not have happened without support from within law enforcement. This trail must be investigated and exposed,” he urged.

Choi Jin-won: Research in rare earth metal sector is intensifying www.gogo.mn

L.Oyun-Erdene, Prime Minister of Mongolia, met with Choi Jin-won, Ambassador Extraordinary and Plenipotentiary of Republic of Korea to Mongolia, to mark the 35th anniversary of diplomatic relations between the two nations.
During the meeting, the Prime Minister reviewed the achievements of the long-standing partnership, highlighting South Korea as Mongolia’s key "third neighbor" and an essential regional partner. He reaffirmed Mongolia’s commitment to deepening economic cooperation, increasing bilateral trade and investment, and expediting joint projects and programs.
Among these projects, he specifically emphasized the need to accelerate the "Solongo-I, II" residential developments and the "10 province central heating station" initiative. He also urged South Korean authorities to facilitate travel conditions for Mongolian citizens and ensure the protection of Mongolians residing in Korea, in line with efforts to strengthen people-to-people exchanges.
Ambassador Choi Jin-won expressed his satisfaction with the progress of the "Strategic Partnership" between the two countries, particularly in urban development, minerals, and energy. He highlighted the ongoing negotiations for an Economic Partnership Agreement and noted that agreements made during the Mongolian Prime Minister’s visits to Korea in 2023 and 2024 are already being implemented.
A key area of focus is the rare earth metal sector. The ambassador confirmed that a joint committee meeting on rare earth research was recently held in Seoul and that research efforts are being intensified. He also reaffirmed South Korea’s commitment to expanding economic cooperation, supporting bilateral projects, and improving travel conditions for citizens of both countries.