Tax Reform Its Impact on Economy

Mongolia is a developing country striving to diversify its economy due to its heavy reliance on mining sector. Since tax environment is critical for business and the economy, Mongolia’s Government has recently implemented radical reforms to taxation. This study examines tax reform and its impact on the economy and focuses on the main indicators of the tax environment in support of business and tax policy in Mongolia’s case in specific. A multi-stage random sample procedure was used in addition to statistical analysis, comparison, multi-factor regression analysis, and correlation analysis. Based on the results of the study provided by corporations on the overall tax environment, Mongolia has an “average” or “below average” tax environment. The tax environment in rural area is more challenging than in the capital city. Thus, it is necessary to pay more attention to encouraging regional development and creating a just and equitable tax environment. Businesses prefer an appealing business environment by minimizing taxes and tax rates; lowering tax burdens; and taking advantage of tax credits, exemptions, and subsidies via suitable regulations, as well as developing an equitable environment to pay fair taxes.