Budget revisions explained

Many people were surprised that the Government could revise the budget draft within 24 hours, but time was of the essence as the budget approval deadline is drawing near. Our journalist asks the Chief of the Budget Policy Board of the Ministry of Finance, B.Batjargal, some questions.

One objection to the original draft was that specific and confirmed sources had not been mentioned for the MNT805.2 billion shown for the income of the Human Development Fund. How, then, is the Fund income the same after revision?

Yes, the income of the Fund is still shown as MNT805.2 billion but the revision clarifies the sources of MNT420 billion in this. The Ministry of Mineral Resources and Energy and officials of Erdenes Mongol LLC have assured us that Erdenes Mongol will provide the money. We shall sign the required documents soon.

Is distribution from the Fund related to the political parties’ election promises? Will this not lead to inflation?

We are aware of the risks. But use of money in the Fund is essential to keep the budget deficit within limits, particularly as more will be spent on paying increased salaries and pensions.

What happens to the budget income if gold and copper prices continue to rise?

As Minister of Finance S.Bayartsogt has several times explained, the budget estimates have been based on an average price of gold, copper and coal. If prices go above this average, the excess money would go to the Stability Fund.

Raising import taxes on cars will hit common people hard even if reduces air pollution and adds to the budget income…

The proposal is not aimed at making money but wants to rationalize regulations. For example, at present there is just one rate of tax for all trucks with more than 20 tons of carrying capacity. But we have trucks with capacity up to even 100 tons and they cause much more damage to roads. And if you talk about people’s hardship, they will find out that buying new cars actually make more economic sense.