The Ulaanbaatar City Council is set to approve revisions to the car tax rate, potentially increasing it by 2-3 times, along with a fivefold hike in road use fees. These changes aim to enhance road infrastructure, address congestion, and improve maintenance and technology. The proposals were introduced as part of discussions on the capital’s 2025 budget, which includes a revenue target of 3.8 trillion MNT—a 20.2% increase from the previous year.
Budget Overview for 2025
Mayor Kh. Nyambaatar outlined the draft budget, projecting 85.9% of the city’s revenue to come from taxes, including corporate income tax, property tax, and personal income tax. Key allocations include:
- 1.3 trillion MNT for operational expenses.
- 1.7 trillion MNT for capital projects, including 97 new initiatives.
- 14.1 billion MNT for financial support to remote districts.
Public feedback was actively integrated into the draft, with 147,135 opinions submitted during citizen consultations across nine districts.
Impact of Revised Car Taxes
The car tax rate, unchanged for 14 years, will be updated to align with legislation designed to modernize road infrastructure. The road fund’s revenue is expected to rise by 151.5 billion MNT, enabling critical improvements in road networks and technology.
This move reflects broader efforts to accommodate economic growth, with Mongolia’s GDP expected to grow by 8% in 2025.
The budget, alongside the tax revisions, awaits final approval following discussions at party group meetings.
