Ministry slaps 10% export tax on gold jewellery

HA NOI – Export taxes on gold including jewellery will increase from the current zero per cent to 10 per cent effective January 1, 2011 pursuant to a new Ministry of Finance circular.

The higher duties were aimed at reducing unlawful exports by gold trading enterprises which have been accused, in the past, of exporting gold jewelry to dodge regulations requires export licences to export gold at a purity of 99.99 per cent.

The decision could help reduce this phenomenon but also make it more difficult for gold trading enterprises to compete with foreign gold suppliers, said Bao Tin Minh Chau Jewellery Co general director Vu Minh Chau.

"The 10-per-cent tax on processed gold is rather high and it will make locally-manufactured gold jewellery more expensive on oversea markets compared to that of other foreign suppliers," Chau said.

"The ministry's new decision will discourage gold jewellery exports," agreed a representative of a Ha Noi-based gold trading enterprise who asked to remain anonymous.

He said his company would have to restruture its business plan and could shift to exporting silver jewellery.

The Ministry of Finance had initially considered a 20-per-cent tax on gold exports after domestic gold prices hit an all-time high of over VND38.2 million (US$1,910) per tael on November 9, but reduced the tax to 10 per cent in the issued regulation. (A tael is equivalent to 1.2 ounces.)

In another move to cool down the domestic gold market, the State Bank of Viet Nam has also decided to allow gold imports for the third time this year. Since that, gold prices have settled back to about VND36 million ($1,675) per tael.

Source: vnagency.com.vn