China Mongolia Tax Structure Essay

Document Type:Thesis

Subject Area:Accounting

Document 1

Mongolia as a country also has its own taxation structure that is used. The type of taxation system used in any country has a great impact to activates are being carried out in that country. Each country modifies its taxation structure to be that of among the best so that it may serve its citizens well and bring great impact on their country at large. METHODOLOGY The study of scholarly articles that entail information about the taxation structure of both China and Mongolia were used to do this research. Government articles explaining how taxation is done, the percentage taxed for each commodity, and even the commodities that are tax free were relevant to the research done. Reading of magazines that are published to explain how the economic status of a country is affected by the system of taxation used. THEORETICAL SIGNIFICANCE AND PRACTICAL VALUE OF THE TOPIC. This research paper is aims at helping to shade light on the Mongolia tax system and also to be used by the government to see which necessary changes should be made in their tax structure. The comparison in the tax structure of Mongolia with that of China is going to enable the scholar to understand which taxation structure is best and how this taxation structures affect citizens and the country as a whole. The difference is the economy and development of countries is due to the difference in the taxation system used by the government of that country. China is used as a comparison because it uses among the best taxation system in the world.

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It is this modern taxation structure used in China that makes China to be so much advanced both in technology and development. There are some similarities and differences in the taxation system of China and Mongolia. Most of the similarities are almost existing in almost all the taxation systems of countries in the world. The differences in the taxation system is what brings the differences in advancement of the two countries. China since it uses the modern taxation system enjoys more benefits than Mongolia that does not use the modern taxation system. This is why we see a great difference in the level of development in the two countries. SIMILARITIES BETWEEN CHINA AND MONGOLIA TAXATION STRUCTURES Foreign companies that are based in China are only allowed to indulge in business activities that are indirect and this is only done through a representative office that is situated in China.

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The Chinese government taxes the foreign companies and it neither allows them to sign contract with the Chinese customers nor engage in businesses operations that are direct. In Mongolia, foreign companies are free to engage in any business activity be it direct or indirect. The Mongolia government has some exceptions on some commodities during imposing custom duty while the Chines government has little or no exception on commodities to be subjected to custom duty. The Mongolia government gives some exception also to some export duties. This brings a big difference between the two countries since China imposes tax in all commodities that are exported and even imported in to their country. Through this, China government is able to raise more capital to run their operations unlike the Mongolia government. In China the export commodities are only exempted from consumption tax.

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Stamp duty varies between the two countries. In Mongolia, the state dictates on the activities to be subjected to stamp duty. It has stated 45 activities that’s should and must be subjected to stamp duty. Example of the activities to be subjected to stamp duty by the Mongolia state is arbitration that the court is involved, services that entail notary among many others. In China the stamp duty is levied only on some special documents that are legal like the certificates used to transfer property from one party to another and business permits that are required in order for one to run business activities in the country. The main aim of this country’s taxing these commodities is to discourage the consumption and use of such commodities. These commodities are harmful to both the consumer’s body and even the environment.

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These taxation are based on the production or manufacture level of such goods. The higher the taxation rate the lower production of this commodities. This translates to saving of the environment that enjoyed by all the creators living within that zonal area. Be it a local citizen or a foreigner a business permit is essential before operating a business activities with the boundaries. This is aimed at regulating the type of commodities offered in the market. The commodities should be environmental friendly and should be legal. It is through business licenses that the government is able to monitor business operations going on and where this business are situated. The fee from business people to get the permit is what goes to the government as tax. Ones the laws are simple, it will be easy for all the citizens and foreigners to understand.

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If the laws are well understood then it is easier for people to choose which business activity to venture in and which not to. The consistence and the certainty of these laws will always make it easier for business people to understand and follow them. The value added tax is also being improved in order for quality services to be offered across the board. Provision for refunds are being included in the value added tax. Feldstein, Martin. Social security pension reform in China.  Urbanization and social welfare in China. Routledge, 2018. Liu, Yu, and Yingying Lu. Pacheco Pardo, Ramon, and Jeffrey Reeves. Weak Power Bargaining with China: Mongolia and North Korea in comparative perspective.  Journal of Contemporary China23. Gemmell, Norman, and Oliver Morrissey. Tax structure and the incidence on the poor in developing countries.

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