The Bangladesh Jewellers Association (BAJUS) has urged the government to lower the current VAT rate from 5 percent to 3 percent on the sale of gold, gold ornaments, silver, or silver ornaments in the jewellery business.
At a press conference in the capital on Wednesday, Anowar Hossain, the chairman of the Bajus Standing Committee, read the association's 15-point demand as well as their proposals for the fiscal year 2024–25.
According to BAJUS, the present VAT rate contributes to soaring prices of gold and silver, exacerbated by inflation and fluctuating exchange rates. For instance, it currently costs approximately Tk1,14,073 to purchase 11.664 gramme (1 bhori) gold ornaments. With BAJUS's fixed minimum wage of Tk 3,499 and the 5 percent VAT of Tk 5,878 added to this, the total price reaches Tk 1,23,450.
Comparatively, BAJUS leaders highlighted that in India, where the VAT is set at 3 percent, the equivalent amount of gold costs Tk 3,436.
BAJUS estimates that reducing the VAT rate to 3 percent in Bangladesh could potentially increase annual revenue collection by Tk 1000 crore.
In addition, a 10-year tax holiday for the gold refinery industry was requested by the Bangladesh Jeweller's Association (Bajus) to the National Board of Revenue (NBR).
Crackdown on smuggling syndicates urged
At a pre-budget press conference, BAJUS also demanded stringent measures to curb illegal activities in the gold market.
BAJUS alleges that smuggling syndicates, in collusion with local illegal agents or bullion traders, are artificially inflating gold prices, destabilizing the market.
They claim that at least Tk 200 crore worth of illegal gold ornaments and bars are smuggled into Bangladesh daily, amounting to approximately Tk 73 thousand crore annually. These activities not only contribute to market instability but also facilitate money laundering.
The association proposed banning the import of gold bars and limiting tax-free gold ornaments to a maximum of 50 grammes, down from the current 100 grammes.
To address these issues, BAJUS emphasizes the need for amendments to baggage rules to discourage informal gold imports. Additionally, they call for a joint study to assess the impact of the dollar crisis, smuggling, and money laundering facilitated by the misuse of gold import provisions.
BAJUS leaders, including General Secretary Badal Chandra Roy, Advisor Ruhul Amin Russell, Vice President Masudur Rahman, and others, stressed the urgency of these measures to safeguard the integrity of the gold market and protect consumers' interests.