Prime Minister: Income tax and retirement age increases will be reverted
Prime Minister U.Khurelsukh and Cabinet ministers reported on the first 100 days in office on January 28, focusing on future plans and targets rather than completed projects.
“The government will correct the increase in personal income tax and regulate so that men become eligible to retire at the age of 60 and women at 55 like in the past. Men can work until they are 65 years old and women until they are 60 years old if they wish to do so. Men can retire at 55 and women at 50 if they engaged in heavy labor or gave birth to many children. The decision to extend retirement age by six months each year will be modified to an extension of three months per year. The new personal income tax rate for four levels of income level will be changed back to a single rate,” announced the prime minister.
U.Khurelsukh promised that individuals who paid higher personal income tax since the adoption of the new tax system will be able to reclaim the amount exceeding their usual tax rate and that monthly cash allowances will be distributed to 80 percent of children in Mongolia. Currently, only 60 percent of children receive cash allowances every month, he said.
During the meeting, the prime minister promised to increase wages, pensions, and welfare in consideration of the unexpected economic growth and good feedback on improvements to budgetary discipline and responsibility. He added that the International Monetary Fund approved of this decision and said that related draft bills will be submitted to Parliament on Wednesday. He hopes to have these bills enacted before the fall session ends.
The report mentioned that over the past 100 days, the economic growth surged, credit rating improved, the balance of trade had “favorable” surplus, a large portion of the state debt was repaid, livestock population rose, and the state revenue increased together with GDP, industrial production, and currency reserves.
As for future plans, Prime Minister U.Khurelsukh believes that the three cornerstones of the country’s development are becoming a food exporting country that supplies healthy and safe food, establishing a reliable energy supply network, and building an oil refinery. Within the scope of meeting these targets, the government is reportedly doing everything in its power to expand thermal power plants, build new power plants in 10 provinces, promote the use of renewable energy, and resume the third National Atar Campaign, which aims to supply the domestic food demand.
The prime minister underlined the importance of maintaining good foreign relations and developing roads and transportation, infrastructure, and information and communications sectors. He stated that the government will support the private sector and entrepreneurs who produce 70 percent of GDP
Prime Minister U.Khurelsukh noted that the development of agriculture and farming will help stabilize the economy and reduce its dependence on the mining sector. This is essential as prices of mining products often fluctuate on the world market. The government is striving to develop an asphalt road network connecting the five western provinces, build a railway between Tavan Tolgoi and Gashuusukhait, and “liberalize” the aviation industry to become competitive, and commission the New Ulaanbaatar International Airport in the near future.
The government action plan includes large projects related to the central wastewater treatment plant, waste processing factory, school and kindergartens, and mortgage loan.
As for anti-air pollution efforts, Prime Minister U.Khurelsukh notified to ban raw coal usage in Ulaanbaatar from April 2019, build a coal processing factory, introduce electric heaters and liquid gas into practice, and house ger area residents. He confirmed that the stoves claimed to be eco-friendly will not be distributed.
Studies show that restricting coal consumption will mitigate air pollution by 50 percent, reported the prime minister.
“Useful strategies used by the former government will be continued and useless ones will be changed,” he stated, and announced that his Cabinet has formulated a development policy based on three pillars as part of the government target to domestically meet food demands, ensure the public has a home and a job, and protect their health.
Cabinet released a brochure, titled “30 Key Projects of the Government led by U.Khurelsukh”, for the 100-day operation review. Highlights in the brochure were “achieving to repay Chinggis Bond debt, nationalizing Erdenet Mining Corporation, granted 500 million USD through discounted loans, and removing Mongolia from the European Union’s blacklist list to an accompanying gray list” to name a few.
DP: Cabinet broke its promise, failed to uphold justice
On occasion the to the Cabinet’s 100-day operation review report, the opposition party held a press conference, rebutting the contents of the Cabinet’s report.
“The government led by the Mongolian People’s Party (MPP) has neither fulfilled its election promise nor completed its action plan during the past six months it ruled the government. The exchange rate of MNT to USD, inflation, unemployment rate, and poverty have increased since 2016, which is a clear indication of how MPP is working and what kind of policy it is implementing,” reported Secretary of the Democratic Party (DP) O.Magnai along with Deputy Head of DP Secretariat N.Ganibal, and President of the Democratic Youth Union of DP S.Erdenebold.
O.Magnai stated, “Prime Minister U.Khurelsukh had J.Erdenebat abdicate by accusing him of pocketing a concessional loan amounting to 807.8 billion MNT together with a few Cabinet members, not distributing children’s monthly allowances fairly, and making civil service into a type of service.
“Yet, during the last 100 days, children’s cash allowances didn’t go to every child, the contract of the concessional loan of 807.8 billion MNT wasn’t annulled, and on the contrary, appointments based on brotherly connections have taken momentum.”
“U.Khurelsukh said that the state would demand reprimand for the issue concerning 60 billion MNT, but no one has been held accountable. So, we have no choice but to conclude that U.Khurelsukh had the previous government resign and became the prime minister only to make a coal agreement and take control of the copper trade,” he scrutinized.
O.Magnai added that state discipline and responsibility haven’t been improved even though they were announced as top priority by Prime Minister U.Khurelsukh. “(U.Khurelsukh)’s Cabinet didn’t discuss large projects and programs aimed to ensure economic sustainability in 100 days, the Glass Account Law hasn’t been implemented, and the health reform hasn’t taken action,” he said.
DP members claimed that the recent artificial scarcity and price spike of fuel were attributed to the prime minister’s announcements.
The opposing party also published a brochure reviewing works of the government led by U.Khurelsukh undertaken in the last 100 days in office.
The brochure was filled with a poor assessment for Cabinet operations, citing that the government carried out a policy dedicated to eliminating the middle class, failed to reform the state budget and policy, couldn’t cut down on operating costs of ministers and other decision-makers, and failed to resolve the issue related to Gashuunsukhait.