WILL PAS­TURE TAX

IM­PROVE LIVE­STOCK HEALTH?

The UB Post - - FRONT PAGE - By T. BAYARBAT

Herders don’t pay any taxes with re­spect to their live­stock or pas­ture, but they would have paid a tax on live­stock be­fore Par­lia­ment re­pealed it in May 2009. Par­lia­ment re­pealed the sec­tion re­gard­ing the tax on live­stock from the Law on Per­sonal In­come Taxes for In­di­vid­u­als to “sup­port” herders who lost their live­stock due to harsh win­ter con­di­tions in 2009, but ob­servers be­lieve that Par­lia­ment’s de­ci­sion was a po­lit­i­cal move to win fa­vor in the 2009 pres­i­den­tial elec­tion as herders con­sti­tute a large por­tion of vot­ers in prov­inces.

Herders would have had to pay an an­nual tax of 50 MNT per sheep and goat, while camels, horses or cat­tle war­ranted 250 MNT each. As Par­lia­ment changed the Law on Live­stock Tax in 2006 based on lo­ca­tion, a herder liv­ing in re­mote ar­eas paid an an­nual tax of 50 MNT per sheep, while herders around Ulaan­baatar were to pay a tax of 100 MNT per sheep, and other herders would pay 75 MNT in tax.

Af­ter amend­ments to the law, herders who started pay­ing more taxes crit­i­cized Par­lia­ment’s de­ci­sion, but all herders were pleased with the 2009 par­lia­men­tary de­ci­sion on tax ex­emp­tion.

Mon­go­lia’s live­stock pop­u­la­tion was 61.5 mil­lion last year, and ac­cord­ing to the 2016 re­port, there were 8.11 mil­lion camels, horses and cat­tle, and 53.42 mil­lion sheep and goats.

If herders paid an an­nual tax of 50 MNT per sheep, the gov­ern­ment would have re­ceived rev­enue of 4.6 bil­lion MNT, which means that a rev­enue of nearly 10 mil­lion MNT could have been streamed to each soum.

For­mer Prime Min­is­ter J. Er­denebat put for­ward a pro­posal to re­in­state the tax on live­stock to Par­lia­ment in 2015, when he was Min­is­ter of Fi­nance, but the ma­jor­ity of MPs dis­agreed with his pro­posal be­cause they were wor­ried about los­ing votes from herders in the 2016 par­lia­men­tary elec­tions.

Some ob­servers be­lieve that al­though law­mak­ers and the gov­ern­ment want to re­in­state the tax on live­stock, they are afraid of op­po­si­tion from herders as Par­lia­ment and Cab­i­net sup­ported a num­ber of tax in­creases, which re­ceived heavy crit­i­cism from the pub­lic, to en­roll in the ex­tended fund fa­cil­ity pro­gram of the In­ter­na­tional Mone­tary Fund.

This year was a great time for Par­lia­ment to re­in­state the tax on live­stock or to cre­ate a new pas­ture tax be­cause they have no wor­ries about votes from herders since there won’t be any elec­tions in the next two years, but in­stead of fo­cus­ing on mak­ing new laws or pur­su­ing ways to in­crease rev­enue and cut spend­ing, leg­is­la­tors have spent their time by fight­ing each other for power since this year’s pres­i­den­tial elec­tion.

Taxes col­lected from herders usu­ally go to the soum, but heads of soums do not spend money from the tax on live­stock to in­crease in­come for herders, im­prove pas­ture con­di­tions or com­bat de­ser­ti­fi­ca­tion.

If the tax on live­stock is re­in­stated, the gov­ern­ment will have to re­visit its pol­icy on how to spend it, and if it fol­lows his­toric prece­dents, this tax won’t sup­port herders’ de­vel­op­ment and pas­ture man­age­ment.

To sup­port the ex­port of live­stock prod­ucts, the Min­istry of Food, Agri­cul­ture and Light In­dus­try is search­ing for ways to im­prove live­stock health.

The gov­ern­ment de­votes over 10 bil­lion MNT to im­prove live­stock health a year in wages for ve­teri­nar­i­ans who work on cam­paigns on live­stock health and breed­ing, and ex­pen­di­tures for vac­cines against an­i­mal in­fec­tious dis­eases.

Only around 70 MNT is spent per cat­tle to im­prove live­stock health a year.

If the gov­ern­ment asks herders to pay an an­nual tax of 100 MNT per sheep to spend the tax for im­prov­ing the na­tion’s live­stock health, al­most all herders will agree to pay be­cause they all want to in­crease their in­comes by be­com­ing cost-ef­fec­tive man­u­fac­tur­ers of Mon­go­lian live­stock and agri­cul­tural prod­ucts that meets in­ter­na­tional stan­dards for ex­port.

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