Gold import made easier

The government yesterday approved the draft gold policy, much to the delight of businesspeople in the sector, as it will make the import of the precious metal easier.

The cabinet committee on economic affairs gave its nod to the Gold Policy, 2018 at a meeting at the cabinet division chaired by Finance Minister AMA Muhith.

After the meeting, Muhith said the policy would allow the country to import gold. “Till date, gold was not imported; rather it was smuggled into the country.”

Usually, policies are not sent to the cabinet. But as it is an important policy, it will be sent to the cabinet seeking consent, said the minister.

Under the draft policy, only authorised dealers of the Bangladesh Bank will be allowed to import gold.

Mustafizur Rahman, additional secretary of the cabinet division, said the policy has been formulated to regulate gold trade.

“Under the policy, imported gold can be exported. There will be a regulatory framework to oversee the purchase and the sale.”   

The policy aims to make import and export of the precious metal easier and ensure transparency and accountability in the local trade.

Under the existing rules, import is allowed, albeit subject to permission from the BB. But in reality, gold has never been imported through legal channels.

Pranesh Ranjan Sutradhar, additional secretary to the commerce ministry, told The Daily Star that steps would be taken soon following vetting by the law ministry to make the policy effective.

Anwar Hossain, president of the Bangladesh Jewellery Manufacturers and Exporters Association, said they have been trying since 1995 for the policy to be formulated. “Finally, it has been done. We will be able to trade gold legally now.”

“We have been doing business of gold for long. Recently, we have come to know that this business is illegal as we don't have a policy.”

He said there was a huge demand for hand-made ornaments abroad and exports could go up thanks to the policy. 

According to the policy, the country's annual demand for gold ranges between 20 tonnes and 40 tonnes. Almost 80 percent of the demand is met with smuggled gold and the rest from recycled gold, depriving the government of a huge amount of tax. Many countries, including India, earn billions of dollars from exports of gold ornaments, but Bangladesh's export earning in this sector is abysmally low.

In 2016, the total export of gold ornaments was $638 billion across the globe. Of the amount, India's share was about $42 billion. Bangladesh exported gold ornaments worth only $672.

EASING GOLD IMPORT

To ease gold import, 11 measures have been laid out in the policy.

The BB will appoint the dealers, who may be an authorised bank, an individual-owned firm, a joint venture or a limited company. The BB will also formulate a guideline for the dealers.

Local manufacturers of gold ornaments will not be able to buy bullion from any other source other than the dealers.

The dealers will have to inform the BB about their requirement of foreign currency to import gold and obtain no-objection certificate from the central bank. The BB will issue the NOC within 15 days upon receipt of a dealer's application.

The draft policy proposes several incentives, including tax benefit and cash subsidies to increase the export of gold ornaments.

Exporters will receive duty draw-back benefit if they import gold bars only for manufacturing and exporting of gold ornaments.

The BB will set up a central information bureau that will keep data on the annual demand for gold, its local trade, import and export, revenue collection, seizure of gold and its sale on auction, and all other relevant data.