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The Tax System of Outer Mongolia, 1911–55: A Brief History
Published online by Cambridge University Press: 23 March 2011
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The Mongolian People's Republic, or Outer Mongolia as it is more commonly known, is a country of some 600,000 square mile area which is bounded on the north by Soviet Siberia, on the south by China, with Manchuria to the east and Sinkiang to the west. Many centuries ago, the western world lived in fear of the Mongol hordes which swept westward as far as the Danube laying waste to all which lay before them. Over the years, the power and importance of Mongolia declined and it fell, at different times, under Russian and Chinese influence respectively. More recently it was under Chinese domination in the first decade of the twentieth century. In 1911, as a result of internal disorders within China, the Mongolians were able to break loose and set themselves up as an autonomous nation. This so-called period of autonomy lasted until 1921 at which time the Soviets gained de facto control of the government. Actual power still resided legally in the hands of a local theocratic ruler. Upon his death in 1924, the present government was established. Since 1924, Outer Mongolia has been a Soviet satellite in the same sense that the eastern European nations have been since the end of World War II. In fact, Outer Mongolia has the dubious distinction of having been the first “People's Republic” to survive as an “independent” nation. Recently, this small nation has been in the public eye as a result of the Soviet Union's unsuccessful attempt to secure for it UN status.
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- Copyright © The Association for Asian Studies, Inc. 1957
References
1 For documentation of Soviet policies, see this writer's Soviet Taxation: The Fiscal and Monetary Problems of a Planned Economy (Cambridge, Mass., 1955). A discussion of Mongolian budget expenditures is contained in this writer's “The Public Expenditures of Outer Mongolia,” Public Finance, to be published in 1957.
The author wishes to acknowledge the generous assistance of the Human Relations Area Files, Inc. in making this present article possible. Materials were collected under the project on Outer Mongolia operating under contract with the Human Relations Area Files, Inc. [HRAF Subcontract HRAF-10 Washington-1].
2 Government archives containing the financial records for this period were destroyed by fire. The only information which remains is contained in I. Maiskii, Sovremennaya Mongoliia [Contemporary Mongolia] (Irkutsk, 1921).Google Scholar
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16 Imports are mainly from the Soviet Union and consist primarily of food products and industrial consumers' goods.
17 These rates are taken from a decree of 1943 and appear to be in force at present. No earlier rates are available.
18 That is to say, a government cannot tax its own enterprises.
19 For an explanation of why the Soviets use both a turnover and profits tax, see Holzman, Ch. iv.
20 See the statute of Jan. 22, 1942, “On Social Insurance in the MPR,” Part I, Art. 3.
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26 This statement is based on the fact that the direct taxes are mildly progressive and the indirect taxes probably mildly regressive.
27 For a fuller discussion of this point see this writer's “Equity of the Livestock Tax of Outer Mongolia,” to be published in 1957 in the American Slavic and East European Review.
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35 In the Mongolian case, as in the Soviet Union, since the bulk of the goods which are subject to the sales tax are sold to the population by the state, there is no possibility of a shift in incidence from consumer to entrepreneur.
36 Suppose that the state pays the nomad a nominal price of 10 tugriks for a certain amount of meat, that costs of processing and distributing amount to another 20 tugriks for total cost to the state of 30 tugriks. Suppose further that the cost of production of the meat to the nomad was 50 tugriks and the state price to the consumer was 100 tugriks. In this case the turnover tax would be 70 tugriks (100 – 30), the tax on the producer would be 40 (50 – 10), and the tax on the general consumer would be 50 (100 – 50).