Project Case Study
Establishing a tax unit for Strategic Mineral Deposits in Mongolia
Building capacity of the Tax Unit for Strategic Mineral Deposits to ensure good management of sector revenue
In Mongolia, 30% of GDP comes from mining, and the country has extensive reserves of copper, coal, tin, tungsten and gold amongst other minerals, which comprise 81% of exports as of 2010, and the sector has been growing steadily since 2002.
With such growth, the government must successfully regulate the industry in order to receive their share of revenue. This is done through taxation, and promoting sustainable and manageable growth which can then be turned into direct returns for the country.
Adam Smith International was asked in 2010 by the World Bank to identify the objectives and functions of the Mongolia tax unit for Strategic Mineral Deposits and to develop an organisational structure and operational procedure for the unit to perform uninterrupted. We sought to facilitate effective coordination of the ministries of finance and mining to increase efficiency, and the project included training for tax inspectors in order to improve human capacity for more effective revenue management.
We also reviewed and assessed international developments regarding further development of Mongolia’s recently acquired full membership of the Extractives Industry Transparency Initiative, looking to move towards a more comprehensive EITI++ format with even tighter safeguards on mining standards and transparency. The project will help protect Mongolia’s mining interests whilst avoiding exploitation and therefore attract greater international investment, allowing the country to move beyond its current low middle income status with the World Bank.
