ArdNews

💼 Parliament Approves Personal Income Tax Relief for Middle-Income Earners 🏛️

June 18, 2026

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🇲🇳 Mongolia’s Parliament has approved amendments to the Personal Income Tax (PIT) framework, introducing a 1% tax rate for monthly salaries up to ₮2 million, equivalent to a 9-percentage-point reduction from the current 10% rate. The measure is scheduled to take effect on January 1, 2028, while the decision to exempt salaries up to ₮792,000 from PIT will take effect immediately.

  • 📊 The reform aims to ease the tax burden on low- and middle-income households. Under the new structure, an employee earning ₮1.5 million per month would see PIT deductions fall from approximately ₮132,750 to ₮13,275, significantly increasing take-home pay.

  • 👥 However, recent labor market data suggest the number of employees earning below the ₮2 million threshold has been declining, while higher-income earners continue to increase. This raises questions about how many workers will ultimately benefit from the measure by the time it comes into force.

  • 📈 At the same time, Mongolia’s average monthly wage has surpassed ₮2.9 million, increasing by more than ₮300,000 over the past year. The rapid rise in nominal wages reflects persistent inflationary pressures and higher living costs, prompting businesses to raise compensation levels to retain workers.

⚖️ Policymakers argue the tax reform will support household incomes and consumption, while critics note that without periodic adjustments linked to inflation and wage growth, the effectiveness of the relief could gradually diminish over time.

💡 Ard Insight

The PIT reduction represents one of the most significant tax relief measures targeting middle-income households in recent years. While it is expected to boost disposable income and consumer spending, its long-term impact will depend on future wage growth, inflation trends, and whether income thresholds are regularly updated to reflect economic conditions.

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