Imported cars are subject to customs tax and excise tax. The government imposes excise tax on imported cars depending on their cylinder capacity and year of production.
Capacity of cyllinder of engine /cc/ | Excise tax (in USD) | ||
Year of production /by year/ | |||
0-3 years | 4-9 years | More than 10 years | |
Less than 1,500 | 500 | 1000 | 2000 |
1,501-2,500 | 1500 | 2000 | 3000 |
More than 2,500 | 2000 | 2500 | 4000 |
Source: Excise Tax Law
Although the world’s big companies, Toyota, Hyundai, Nissan, Suzuki, Ford, Mercedes Benz, and BMW, have authorized sales agents in Mongolia, people still prefer driving cheaper and used cars.
“Many Japanese used car exporter companies expressed their interests in cooperating on sales in the Mongolian market, which is rapidly growing,” said a businessman of an auto trading company.
“But our government lacks attention and checks on the imported cars whether they are stolen cars. The government only cares about collecting taxes. We [importers] don’t declare the price of vehicles truly because the customs tax is high.”
Japan exports used vehicles to over 180 countries; the largest markets are Russia and New Zealand, according to Japan Used Motor Vehicle Exporters Association. “In the future, further increases of Japanese used export are expected, especially to developing countries,” noted Hiroshi Sata, chairman of the association.
“We sell used Toyota Mark II for US$5,000, Land Cruiser US$25,000, Mitsubishi Pajero for US$9,000, and Toyota Raum for US$4,500. Buyers like Japanese ones because of safety, but the spare parts are more expensive than Korean ones,” said a retailer of Dako Auto, one of the largest auto vehicle importing companies in Mongolia.
In an effort to promote automobile manufacturing in the country, the government committed to not charge any excise tax on exporting cars, which were manufactured in Mongolia, by the Excise Tax Law of Mongolia.
Up till today, this sector is still vacant, awaiting potential investors.
“We have no record of this type of proposal submission. If someone foreign investor proposes, we will support it,” said an officer of the Mongolian Chamber of Commerce and Industry.
Source: www.newswire.mn. All tax information and prices here should be checked for any updates.
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