15% VAT on Gold Imports to be Abolished

SEATTLE (Scrap Monster): The government of Bangladesh has proposed to abolish 15% value-added tax (VAT) on gold imports into the country. The proposal was made by AHM Mustafa Kamal, Minister of Finance during his budget speech in the country’s Parliament on Thursday. The proposal is aimed at curbing illegal imports of gold and legal gold imports through authorized dealers.

The Minister noted that the existing high VAT structure has resulted in significantly reduced gold import volumes, despite the government policy implemented in 2018. The recent proposal would boost gold import through legal route, thus benefiting the local jewellery manufacturing industries.

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Earlier in January this year, the jewellers trade body had requested the National Board of Revenue (NBR) to reduce customs duty on imports and abolition of the provision that allows bringing huge quantities of gold under the baggage rules. Incidentally, the baggage rules allow passengers to bring 100 grams of gold without having to pay duty and up to 234 grams by paying duty. Additionally, it had demanded early resolution of complexities associated with VAT.

The country’s total demand for precious metals is estimated at around 42 tonnes per year.

The proposal to withdraw the existing 15% VAT on gold bar imports could lead to gold price decline in the country.