Mongolia Secures Historic Tax Win Against Multinational Mining Giant: Key Points and Reactions

New Victory for Mongolian Government: USD228 Million Recovered from Turquoise Hill

Ulaanbaatar, Mongolia — In a significant achievement for Mongolia’s government, the country successfully recovered USD228 million in taxes owed by the multinational mining company, Turquoise Hill, in 2019. This victory comes after years of efforts to bolster Mongolia’s tax system with the support of organizations like the OECD and UNDP.

Key Points: Mongolia’s Tax Triumph over Turquoise Hill

1. Historic tax recovery: Mongolia secured USD228 million in taxes owed by Turquoise Hill.
2. Lost opportunities: This amount could have effectively doubled Mongolia’s spending on healthcare and education if paid on time.
3. Global impact: Developing countries lose over USD100 billion annually due to tax evasion.
4. Mongolia’s challenges: Nearly one-third of Mongolians live below the poverty line, and another 15% are at risk of joining them.
5. Tax evasion: Multinational corporations, like Turquoise Hill, had been using shell companies to reduce their tax burden.

A Transformative Tax Scandal: Oyu Tolgoi Mine and Turquoise Hill

• The backstory: Turquoise Hill, a Rio Tinto subsidiary, took control of Mongolia’s Oyu Tolgoi mine in 2009, which is one of the world’s largest copper and gold mines.
• Unexpected outcomes: While the Mongolian government anticipated significant financial benefits through profit sharing and tax revenue, the mine’s revenues failed to deliver substantial benefits to Mongolia, despite Turquoise Hill announcing more than USD1 billion in annual revenue.
• Tax evasion uncovered: An audit performed by Mongolian authorities revealed that Turquoise Hill had transferred a considerable portion of the mine’s earnings to Dutch and Luxembourg-based shell companies, resulting in a significant reduction in taxes owed to Mongolia.

A New Era of Accountability and Revenue in Mongolia

To ensure corporations pay their fair share, Mongolia implemented a new tax law, which prevents companies from offsetting their current tax bills using ongoing investments and future expenses, known as “ring-fencing.” This legislation forces companies, like Turquoise Hill, to pay their taxes without taking advantage of tax loopholes, generating essential revenue for public spending on education, healthcare, transportation, electricity, housing, and other essential services.

Citizen Responses: Heart 🌍, Wow 🌟, Yay 💖, Sad 😔, Poop 💩, Angry 😡, and Voted 👍🏻

• Love 🌍: People rejoice at Mongolia’s success in recovering substantial taxes from a multinational mining corporation and its impact on Mongolians’ lives.
• Awe 🌟: Many are amazed at Mongolia’s determination to enforce tax laws and hold corporations accountable.
• Joy 💖: Mongolians express excitement about the possibilities of increased funds for essential services and a stronger economy.
• Sadness 😔: Some are disheartened by the fact that these funds could have been available much sooner had revenues been properly collected.
• Disgust 💩: Mongolians condemn Turquoise Hill and other companies for using tax evasion to manipulate financial systems.
• Anger 😡: Strong feelings against Turquoise Hill and similar corporations due to the impact of their tax evasion on the Mongolian economy and its citizens.
• Support 👍🏻: Citizens show their approval of Mongolia’s government’s efforts to recover taxes and strengthen their financial system.