ILO shares survey results on simplified tax and social insurance for MSMEs in Mongolia

The International Labour Organization (ILO) has presented the results of a survey on simplified tax and social insurance schemes for micro, small, and medium enterprises (MSMEs) to constituents in Mongolia, according to a press release. On 16 February 2026, the ILO national consultant shared the findings with the working group revising the Law on Supporting Small and Medium Enterprises Services during a virtual meeting. On 31 March 2026, the consultant presented the results in person to staff of the Mongolian National Chamber of Commerce and Industry (MNCCI). The sessions focused on international experiences and recommendations for Mongolia’s legislative reform. The discussions are expected to inform ongoing efforts to facilitate MSME formalization.

In Mongolia, tax and social security contributions remain key obstacles for self-employed workers and MSMEs in transitioning to the formal economy. The Government of Mongolia is planning to amend the Law on Supporting Small and Medium Enterprises and Services. The amendments focus on exploring new ways to support MSMEs through tax and social security policies. The ILO’s engagement forms part of the Formalization of the Informal Economy Project (Phase II). The initiative aims to address structural barriers to formalization.

The national consultant reviewed international experiences, including social security contribution, tax concessions, exemptions, and simplified schemes. Recommendations were developed based on lessons learned from other countries. During the virtual meeting, Gerelzaya, Director of the Policy Coordination Department, highlighted Kazakhstan’s use of the MCI index to define MSME status as an interesting example for possible inclusion in the law. She also noted the relevance of the South Korean approach, where the number of employees does not determine MSME status. These examples offered potential models for Mongolia’s reform process.

Munkhbayar, a working group member, noted the importance of prioritizing development directions while proposing a mono-tax approach for targeted sectors. At the meeting held at MNCCI, Saruul, General Secretary of the MNCCI, emphasized the survey’s value, particularly regarding expanding social security coverage. She stated that the MNCCI, as the employers’ representative, “would advocate for this key recommendation during discussions on the draft law supporting SMEs.” The exchanges reflected the perspectives of both government and employer representatives. Participants considered how international practices might be adapted to Mongolia’s context.

The survey results are intended to guide the revision of the Law on Supporting Small and Medium Enterprises and Services. The recommendations address simplified tax and social insurance schemes as tools for encouraging formalization. The MNCCI indicated its commitment to promoting expanded social security coverage during upcoming legislative discussions. The ILO’s continued support aligns with broader efforts to foster the transition of informal workers and economic units to formality in Mongolia. The next steps will unfold as the draft law progresses.