B. Batjargal, head of the Budget Regulatory Coordination Department at the Ministry of Finance said, “MPs of the standing committee on budget decided that it is good idea to discuss the amendments to the windfall profit tax law after looking at a performance report of the taxes that gold mining companies have paid since the windfall tax.”

A draft law submitted to the Speaker of Parliament on November 13 calls for the 68 percent windfall profits tax gold price threshold to be raised from US $500 to $650 amid falling gold sales to the Mongol Bank, officials said.

“The Ministry of Trade and Industry does not support the windfall profit tax law. We supported the idea of increasing the threshold price of gold, in other words US $650, for a 68% tax on sales of gold,” B. Nergui, Deputy Director of Geology, Mining and Heavy Industry told MonInfo Thursday.

The windfall profits tax, passed last May, calls for a 68 percent tax on sales of gold when the world prices rise above US $500 per ounce and $2600 per tonne of copper.

“We believe that it is correct to make amendments to the windfall profits tax law because we believe the price of gold will remain stable on the international market for the next year,” said Nergui.

Gold sales to the Mongol Bank have drastically decreased in the first ten months of 2006, with a deficit of more than 5.5 tonnes compared to the same period for 2005, according to a Mongol Bank report.

According to an interview of L. Zorig, Chairman of National Tax Authority, which was printed in the Daily News paper on Tuesday, he assumes that gold mining companies are holding out on paying the tax on gold because they have an expectation that the threshold price will increase. Officials at the Tax authority said to refer to Zorig’s interview printed in the paper since he was unavailable for comment.

During the Discover Mining Conference in September, some lawmakers claimed that the tax would be, “short-lived,” and predicted a rescinding during the fall session.

One source said that Ts. Nyamdorj, Speaker of Parliament commented at the standing committee meeting that the proposal of the draft law on making amendments to the windfall profits tax was just submitted based on the gold companies wishes to the government. Nyamdorj told the government to reconsider submitting the amendments.

“We are assigned to introduce what we have done in terms of collecting taxes from gold companies. Now we are getting ready to introduce it at a meeting of the standing committee,” said J. Ganbat, Head of Revenue division of Budget Regulatory Coordination department at the Ministry of Finance.