It also proposes halving the Tk2,000 customs duty on per bhori gold at the import level
Bangladesh Jewellers Samity (Bajus) has proposed a ban on foreign investment in jewellery production, marketing, and wholesale and retail sales for the next 20 years.
It has sent a proposal to the commerce ministry in this regard.
The proposal, signed by Bajus President Enamul Haque Khan and General Secretary Dilip Kumar Agarwala, was sent to Commerce Minister Tipu Munshi on 15 February.
Bajus also called for reducing VAT on jewellery products and customs duty on gold imports.
Its officials said the revised gold policy had prioritised local investment for 20 years for the development and capacity building of the domestic industry in setting up and operating gold refineries in the country, but foreign investment in the production and sale of gold ornaments had not been banned.
That is why Bajus proposed a ban on foreign investment in jewellery business for at least 20 years, like gold refineries.
Dilip told The Business Standard, "The gold policy prohibited foreign investment in setting up and operating gold refineries. But foreign investment in the production and sale of gold ornaments – one of the key points of the policy – was not banned. We requested the commerce minister to do that."
Bajus proposed reducing the existing VAT on gold ornaments from 5% to 1.5%. It said as gold is a precious metal, a 5% VAT at the consumer level becomes a huge amount. As a result, low- and middle-income consumers are reluctant to pay VAT.
Similarly, well-off consumers are rejecting the VAT and are buying duty-free jewellery from neighbouring countries without VAT, added Bajus.
It also said despite Bangladeshi artisans being the best in the world in making handmade jewellery, the country is losing earnings due to extra VAT.
Also, local traders are facing a shortage of customers and the government is losing a big amount of revenue.
Hence, Bajus proposed imposing 1.5% VAT on jewellery at the consumer level or 15% on jewellery wages only.
Dilip said, "There is 1% VAT on gold ornaments in Dubai while in India, it is 3%. Generally, VAT is levied on the added value. So, we proposed 15% VAT on jewellery wages or 1.5% on the total price."
Bajus also proposed halving the Tk2,000 customs duty on per bhori gold at the import level. It said due to customs duty, the price of gold in Bangladesh increases at the raw material level compared to the world market.