Ulaanbaatar, September 3, 2025 /MONTSAME/. Prime Minister of Mongolia, Zandanshatar Gombojav, delivered a statement on the 2026 state budget regarding the submission to the Great State Khural (Parliament) and outlined the core priorities of the budget.

Premier underlined that the 2026 state budget was drafted for the first time with public participation, emphasizing policies aimed at reducing the tax burden, limiting state intervention, expanding opportunities for the private sector, and supporting small and medium-sized enterprises as well as individual citizens. Limiting budget overexpansion is considered an optimal reform for overcoming economic difficulties.

The 2026 budget cut government spending but focused on supporting human development. It also aimed to reduce taxes for citizens and wealth creators.

To support the tax reform initiative, VAT relief will be introduced in stages, starting with differentiated incentives based on purchase categories:

Specifically, VAT refunds will be set at 5 percent for purchases up to MNT 1 million and 2 percent for purchases exceeding MNT 1 million. However, starting in 2027, the plan is to refund 10 percent for purchases up to MNT 500,000, 5 percent for purchases between MNT 500,000 to MNT 1 million, and 2 percent for purchases over MNT 1 million.

By implementing these reforms, VAT will be applied fairly and transparently, helping expand the tax base and uncover tax evasion.

To support the private sector and reduce the tax burden, the threshold for tax relief for small and medium-sized enterprises will be set between MNT 1.5 and 2.5 billion. In addition, the draft regulation proposes raising the simplified VAT regime threshold from MNT 50 million to MNT 400 million.

All available opportunities will be explored to increase coal exports, and the target of exporting 85,000 tons in 2026 has nearly been achieved. With continued demand in the Chinese market, there is potential to raise exports to 200,000 tons annually. State-owned companies have been instructed to make tangible progress in this area.

The health sector prioritizes a strong system for emergency and intensive care services over building hospitals.

In the 2026 budget, MNT 2.27 trillion is allocated to the health insurance fund, with the program focusing not only on increasing the insurance fund but also on regulating risk bearing and strengthening public oversight.

A policy will be adopted to reduce the number of state-owned companies from 108 to 70. These companies will be required to cut costs and operate more efficiently. For instance, sales revenue, transportation, and exports at Erdenes Tavantolgoi JSC have tripled following the appointment of a team of Plenipotentiary Representatives.

MNT 70 billion has been allocated for land acquisition at 24 sites in Ulaanbaatar for the construction of schools and kindergartens. Moving forward, standardized guidelines for constructing state-owned educational facilities within residential areas will be mandatory.

The PM, along with the sectoral ministers, addressed questions from journalists and stated that the budget is publicly available on the websites of the Parliament and the Ministry of Finance of Mongolia, making it accessible for public review.