MONGOLIA CEO CLUB CALLS FOR RESOLUTION OF THE SOUTH GOBI SANDS (SGS) RELATED TAX ISSUE ACCORDING TO APPROPRIATE LAWS AND REGULATIONS
clock 2015-02-11 06:30
MONGOLIA CEO CLUB CALLS FOR RESOLUTION OF THE SOUTH GOBI SANDS (SGS) RELATED TAX ISSUE ACCORDING TO APPROPRIATE LAWS AND REGULATIONS
“Mongolia CEO Club” has been established in 2009 by the initiative of executives and leaders, which have significant contibutions to the growth of Mongolian economy and private sector development; and since its establishment the Club became the voice of business community to continiously promote the improvement of business environment in Mongolia, attraction of investments, reduction of unemployment, improvement of economic education and knowledge in the society. CEO Club includes captains of most reputable, leading taxpayers and companies in Mongolia, and major accomplishments in recent years include initiating and organizing of the Mongolia Economic Forum (MEF), Mongolia Investment Summit, the Year for Reforming of Business Environment and many other initiatives and events. The club represented the business community on multiple occasions in communicating and delivering proposals and suggestions to be reflected in business related legislature to the Government and the Parliament/State Ikh Khural and many suggestions have been reflected in relevant laws and regulations.

Currently, economic growth is slowing down globally and prices of mining commodities are stagnating and many countries are working to improve their competitiveness by advancing their business environment and compete to attract the investments.
Despite the Govenment policies and efforts to promote investment and improve the business environment some of its surprising and unexpected measures and the law enforcement mistakes vanish all our struggle and efforts; and the dissappointing news about the Mongolian business environment and its legal system spreads out among the foreign investors which may result in negative consequences for business and the national economy.
It is stipulated that the General Taxation law of Mongolia and the law on Resolution of Administrative Cases regulate tax disputes, and the tax dispute of other companies is a subject for the resolution in administrative manner. It is not the intension of our Club to judge the court decision whether it is right or wrong; however, the members of the CEO Club extremely regret for the decision to fine the South Gobi Sands company for the overwelming amount of MNT 35.3 billion and the unfair, too severe punishment of its former employees making them criminals despite the possibility of resolution of its tax matter in administrative manner.
This is not the issue of one particular company and its employees. Deficiencies in tax legislation and inadequate and unclear methods of law enforcement lead to differences in their interpretation among the tax agencies and taxpayers, and as a result it leads to tax disputes. For instance, the majority of MNT 24.3 billion out of abovementioned MNT 35.3 billion is due to continious MNT\Tugrug depreciation in recent years, and the court decision creates a wrong precedent in our country to justify the potential conviction and suppression and imprisonment of all entities and individuals with foreign debt and payables. We appeal and call for immediate, starting from today, stopping the wrong practice of saddling the burden of flawed, imperfect legal environment only on the shoulders of taxpayers and wrong practice for the conviction of them as criminal acts, we call for revoking the relevant law provisions.
We believe that highly skilled foreign and national professionals play the enormous role in creation of favorable investment and business environment, and the accomplishment of the economic development; all the accomplishments are due to their hard work. Therefore, the members of the CEO Club call for urgent analysis of this situation and for bailing out and pardoning of former employees of South Gobi Sands LLC Messrs. Justin Capla, Hilarion Cajucom, Christobal David, for protection of jobs and livelihood of hundreds of South Gobi Sands LLC employees; and call for making the decision in accordance with the relevant and appropriate laws and regulations.

THE CHIEF EXECUTIVE OFFICERS' CLUB