In compliance with applied laws and relevant rules, royalties are paid by license holders only. However, entities who intermediate, transport and concentrate mineral resources and those who do not hold licenses but sell minerals do not pay royalties according to the existing rules.

Therefore, the Cabinet renewed rules, namely ‘Fixing, imposing, reporting and paying royalties’ and ‘Calculating royalties on the sales of coal, iron ore and iron ore concentrate sold at external markets’ and resolved to impose equilibrated royalty.

Accordingly, legal units who sold mineral resources, loaded for selling and used, and those who sold gold to the Bank of Mongolia and its authorized commercial banks must pay royalties. By doing so, there will be conditions to define the base of income tax truly and thoroughly, which will lead to increase tax revenue.

Since the mining sector makes about 25 percent of revenue accumulated to the state and local budgets, the renewed rules are considered essential to broaden the base of budget revenue.