Oyu Tolgoi Investment Agreement leads to record tax haul border town customs

Mongolian mine pays 69 per cent of all income

Ulaanbaatar, Mongolia (ot.mn) – The Investment Agreement that governs the Oyu Tolgoi project has generated over 130 billion MNT (Tugriks) in taxes for Gashuun Sukhait (GSK) border customs during the first three quarters of this year.

The GSK Customs single-handedly brought in over 188 billion MNT in nine months – the highest amount amongst any Mongolian customs agencies. Oyu Tolgoi accounted for 69 per cent of this.

However, the news is even better as this figure does not include the custom and duty paid by Oyu Tolgoi’s contractors at the border.

Revenues to the Mongolian government already exceed 1 trillion MNT in collected taxes for the first nine months of 2011 – against a plan to bring in 960 billion MNT throughout the whole year. Receipts from Oyu Tolgoi are a major contributor to this.

The one trillion MNT collected in tax by customs accounts for 10 per cent of Mongolia’s GDP.

Oyu Tolgoi CEO Cameron McRae said this was yet another example of the worth of the Investment Agreement for Mongolia.

“We are glad we have been recognised as such a major contributor to Mongolia. The Investment Agreement keeps giving back to Mongolia – when you include equity, dividends, taxes, royalties and VAT the government will get more than 55 per cent of pre-tax profits:” he said. “That’s a good deal in anyone’s book.”

He added that the benefits of Oyu Tolgoi’s Investment Agreement extended far beyond direct taxes.

“Under our ‘Mongolia First’ programme, we have more than 1,000 Mongolian suppliers listed on our books, with more than US$1 billion already committed to local suppliers” :he said.