Legalise gold stocks by June
The tax benefit granted to gold traders and jewelers to legalise undeclared stocks of the bullion and other precious metals will not be extended beyond June 30, said the National Board of Revenue yesterday.
Md Mosharraf Hossain Bhuiyan, chairman of the NBR, said: “The tax benefit is a special treatment and it will not be extended.”
He spoke at the inaugural ceremony of the Gold Fair at the InterContinental Dhaka hotel. The three-day fair is also being held at the divisional cities simultaneously.
The fair aims to simplify the legalising procedure of precious metal and dispel the fear of jewelers on tax payment.
“If you fail to legalise your undeclared stocks of gold and other precious metals in the fair, you can go to regional tax offices,” he said.
“But don’t wait for the last day. If you have undeclared stocks of gold, you will face many problems.”
Traders can legalise their undeclared stock of gold through payment of Tk 1,000 as tax per bhori (11.664gm), according to a recent notice of the NBR.
In case of cut and polished diamond, the tax will be Tk 6,000 per carat and for silver, it is Tk 50 per bhori.
Bhuiyan said electronic fiscal device is going to be introduced all over the country. Once they are installed, everyone, including jewelers will have to pay tax properly.
Dilip Kumar Agarwala, general secretary of the Bangladesh Jewellers Samity (BAJUS), demanded tax holiday for jewelers and plots for jewelry exporters at export processing zones.
The Gold Fair should be organised at district level, he said.
Agarwala, also the managing director of Diamond World, said the value-added tax in the gold sector should be competitive with those in neighbouring countries, where the tax rate is not more than 3 percent compared to 5 percent in Bangladesh.
“Consumers don’t want to pay such a high VAT,” he said.
Agarwala demanded bonded warehouse facility for the gold sector as it has huge export potential.
Responding, Bhuiyan said Bangladesh’s hand-made jewelry products have huge demand abroad, so the government will provide all kinds of support to the sector.
“We will ensure bonded warehouse facility for jewelry exporters under the same condition set aside for other sectors.”
But the products that will enjoy the bonded warehouse facility on imports will have to be exported, he said.
“We want to diversify our export basket and gold jewelry is a promising sector and can become an export item.”
Gold importers need to obtain a licence from the Bangladesh Bank. The renewal fee for the licence will be cut and the time for the renewal will be extended to three years from one year now, Bhuiyan said.
Kanon Kumar Roy, member for tax policy at the NBR, said jewelers and gold traders have huge amount of undeclared gold stocks and once they are declared, it will have multifold impact on the economy.
“If anybody fails to legalise the undeclared stocks using the current facility, they will face problem in the future. If the price of gold is shown lower, they will face problem.”
Ganga Charan Malakar, president of the BAJUS, and Nahar Ferdousi Begum, commissioner of the Tax Zone 1, also spoke at the event.
Later at a press briefing at the same venue, the BAJUS urged gold traders and jewelers to legalise the undeclared gold and other precious metals.
“Please legalise your undisclosed gold. If you don’t, you will be responsible for your mistake,” said Agarwala, also the vice-president of the Federation of Bangladesh Chambers of Commerce and Industry.
There are 17,000 VAT-registered gold traders in Bangladesh and they paid about Tk 400 crore in VAT last year. The market size is Tk 1,000 crore, according to the businessman.
