Last month, Minister of Economic Development Batbayar N. stated that his ministry is working on the draft of economic amnesty law. He believes that this law will allow the hidden and concealed savings and resources within and outside the country to enter the economic activities of the country.
Closest example would be Chairman of the Russian party LDPR, Vladimir Zhirinovsky’s statement on the similar matter. He has been advocating to pass Russia’s Economic Amnesty Law for years now. He argues that in the beginning of 1990’s, when the Soviet Union collapsed, counters were emptied, people were scared and hungry, so they did what they had to do to survive. Due to the strict criminal codes at the time some ‘new’ Russians hid their income or left the country. Thus, passing the law would enable these resources contribute to the economy as investments and savings.
Does Mongolia has the same situation? It is true that we see politicians and government officials that never ran a business have multi-million dollar houses and hundred thousand dollar cars. Few years back in 2008, we passed the Tax Amnesty Law to give one-time break for those who had unpaid taxes. What was the effect of the law? Those entities who paid taxes in time ended up with less, and those didn’t pay ended up keeping their cash. In 2008, companies weren’t hungry or struggling. World financial crisis wasn’t having a direct effect in the country. So, these companies ended up winning.
Then, how would the economic amnesty law should be perceived? Are we going to forgive everyone, even those that got sentenced? Does it mean that state property embezzlement and frauds will be forgiven? The Russia’s law was passed last July. If we look at the income disparity in the country, it will become apparent that the majority led a life that is humble and poor. Wouldn’t that anger the public? Wouldn’t that create a political instability which is the last thing cabinet wants at the time when MNT is in a free-fall?
We will update our readers on the development of the law in due course.