Bangladesh Jewellers’ Association (Bajus) on Monday (5 June) proposed cuts in the value-added tax (VAT) for jewellery sales from the existing 5% to 3%.
This demand was made during a press conference held at the Bajus office in Bashundhara City Complex, Dhaka, regarding the proposed FY24 budget
Anwar Hossain, vice president of Bajus, presented the written statement on behalf of the association.
According to Bajus, the current cost of a bhori of 22-carat gold jewellery is Tk96,694.3500. With a 5% VAT, the price will rise to Tk105,203. This price increase places an additional burden on consumers, the association added.
However, Bajus believes that a VAT reduction would lower the cost of ornaments, encouraging more purchases and leading to increased government revenue.
Furthermore, Bajus highlighted amendments to the baggage rules in the proposed budget for the F24. Under the revised rules, passengers are now allowed to bring only one gold bar weighing 117 grams into Bangladesh, whereas previously they could bring two bars weighing 234 grams.
Anwar Hossain said, “This step will significantly contribute to curbing gold and money smuggling in our country. Gold bars or ingots were freely entering the country through the baggage rule, enabling smuggling both within and outside the country.”
Despite some positive aspects of the latest national budget, Anwar Hossain expressed disappointment on behalf of the jewellery industry, as their expectations still needed to be fully met.
Bajus emphasised the need to control the import of gold ornaments, similar to gold bars, and proposed a reduction in the baggage rule limit from 100grams to 50grams. This measure aims to safeguard the local jewellery industry.
Bajus believes that high costs of raw materials, production, and import duties on industrial machinery pose significant challenges in meeting the demand for gold in the country.
Currently, the jewellery industry faces import duties ranging from 30% to 60% on various products and machinery, significantly higher than those imposed on other local initiatives. This disparity hinders investment and calls for a reduction in these duties, it added.
Several other claims were made by BAJUS to foster the development of the jewellery industry. These include refraining from installing EDF machines in jewellery establishments to avoid unnecessary harassment, reducing the customs duty on unrefined gold from 5% to 1% conditionally, and imposing a 5% customs duty for IRC holders and VAT-compliant industries instead of the current 10% duty on partially refined gold.
Bajus estimates that there are approximately 40,000 jewellery companies in Bangladesh. Although the reported demand for gold in the country is 40 tonnes, the association argues that the actual demand is much higher.
