Ulaanbaatar City Tax: Industry Asks to Halve It to 1% From 2027
Short answer: Mongolia's tourism, hotel and restaurant associations have asked Ulaanbaatar to cut its city tax from 2% to 1% from 1 January 2027. The tax is charged on sales at hotels, restaurants and bars in the capital, so a cut would take a small amount off city bills. City leaders have said the request will go to an upcoming City Council session. As of 25 September 2026 nothing has been decided.
What happened this week
On 23 September the Mongolia Tourism Organization (MTO) announced that it had joined a joint appeal with the professional associations for accommodation, tourism, food production and food service. The appeal asks the Capital City Citizens' Representative Khural (the City Council) and the Governor of Ulaanbaatar to lower the city tax from 2.0% to 1.0%, starting 1 January 2027. The associations want the change built into the city's 2027 budget planning. MTO says it is ready to give professional advice and to work with the city's agencies on the details.
National news site ikon.mn reported the same day that the city's leadership had agreed to put the proposal to an upcoming session of the City Council. The public broadcaster MNB reported that the council would consider it but had not committed to approving it. According to MNB, the associations also asked that city-tax revenue go to practical services such as sanitation, street lighting, tourist information and food safety.
What the city tax is, and why the industry wants it cut
Ulaanbaatar's capital city tax dates from 2015. It is charged as a percentage of sales by businesses in the service sector. According to KPMG Mongolia, that covers hospitality, restaurants, bars and vehicle services. The rate was 1% until the city doubled it to 2% on 1 January 2024, when the city budget expected the rise to bring in about MNT 32 billion that year. The associations are asking, in effect, for a return to the pre-2024 rate. (Background on how the tax was first set up is in this Lehman Law explainer.)
The appeal makes its case with some sobering figures. According to MTO, the sector employs 41,100 people directly and supports about 83,000 jobs once seasonal and indirect work is included. Research by the associations says that over the past two years 25% of food-service businesses have stopped trading, and 20% of resorts and tourist camps cannot keep operating.
Busy arrivals, struggling businesses
The appeal comes in a strong year for visitor numbers. Xinhua, citing Mongolia's Ministry of Culture, Sports, Tourism and Youth, reported 705,098 foreign tourists in January–August 2026, 17.9% more than in the same period of 2025. Russia, China, South Korea, Japan and Kazakhstan were the biggest markets. The government's stated aim is at least one million foreign visitors a year, and its "Years to Visit Mongolia" campaign now runs through 2028.
So the industry's argument isn't that travelers have stopped coming. It's that more visitors haven't translated into healthy margins for the restaurants, hotels and camps that serve them. In a country where most visitors come in a few summer months, those businesses have to earn enough in the high season to carry them through a long, quiet winter.
What this means for your trip
For 2026 trips, nothing changes. The 2% rate applies for the rest of this year whatever the council decides.
For 2027 trips, the effect would be small but real. On an MNT 300,000 hotel bill, one percentage point is MNT 3,000. Across a week of hotels, meals and drinks in the capital it adds up, but it won't make or break a budget.
It only applies in Ulaanbaatar. This is a capital-city tax, so countryside ger camps and restaurants outside the city aren't covered by this decision.
Watch the City Council. No session date has been published yet. We'll report the decision here once it's made.
Check your other 2027 plans too. Entry rules change at the end of 2026; see our visa-free entry update.
How Enza Tours can help
We're based in Ulaanbaatar and we follow decisions like this so you don't have to. If you're planning a 2027 trip, we can put together an itinerary that balances time in the capital with the countryside. Our guide to cultural tours in Ulaanbaatar is a good place to start, and our month-by-month season guide will help you pick your dates.
FAQ
What is the Ulaanbaatar city tax?
It's a tax on the sales of certain service businesses in the capital, including hotels, restaurants and bars. It has been 2% since 1 January 2024, up from 1% before that.
Will the city tax go down in 2027?
Not yet decided. Industry associations have asked for 1% from 1 January 2027, and city leaders say the request will be discussed at an upcoming City Council session. As of 25 September 2026 there is no decision.
Do travelers pay the city tax directly?
It's charged on the business's sales, so for visitors it's part of what you pay for a hotel night, a meal or a drink in Ulaanbaatar. It isn't a separate arrival or per-night tourist tax.
How many tourists visit Mongolia in 2026?
According to the tourism ministry figures reported by Xinhua, 705,098 foreign tourists arrived in January–August 2026, up 17.9% on the same period in 2025.
