Import tax for gold on cards
The government may impose an import tax of Tk 1,000 to Tk 2,000 per bhori of gold under a new policy, mainly to discourage smuggling and use of legal channels to bring in bullion.
The decision was taken at a meeting of finance and commerce ministries, the National Board of Revenue and the Bangladesh Bank with Finance Minister AMA Muhith in the chair last week.
The revenue board might issue a circular in this regard this month.
A consolidated tax of Tk 1,000 a bhori (11.66 gram) stocked will be slapped, a commerce ministry official said.
Under the policy, tax on gold bar imported by authorised dealers would be Tk 2,000 per bhori.
On October 3, the cabinet approved the first-ever gold policy of the country aiming to make import and export of the precious metal easy, stop smuggling and ensure transparency in its trade.
After the policy was approved, a 7-member committee was formed in November led by the commerce secretary to recommend the amount of tax.
The committee recommended Tk 6,000 tax on per carat cut and polished diamond and Tk 50 tax on per carat silver.
The committee also called for continuation of the existing policy for import of gold under the baggage rule, which allows an airline passenger to bring a certain amount of product tax-free. The amount of gold to be allowed to import tax-free under the rule has been recommended to increase slightly. The NBR will decide by how much it will go up, said a commerce ministry official.
According to commerce ministry documents, Bangladesh's annual demand for gold ranges between 20 tonnes and 40 tonnes and almost 80 percent of it is met by smuggled gold and the rest by recycling.
This deprives the government of a huge amount of revenue and creates the scope for money laundering and accumulation of black money.
The existing rules allow import of gold, subject to permission from the central bank. But in reality, gold has never been imported through legal channels since the country's independence.
Between 1971 and 2015, 2.2 tonnes of seized illegal gold worth $90 million had been added to the foreign currency reserves.
Big hauls of the bullion make headlines regularly and indicate that gold is often smuggled into the country.
Under the new policy, traders would declare their stocks of gold and other precious metals to the VAT authorities within six months of the policy issuance. Every month, they would submit balance sheets of their sales to the VAT authorities.
The commerce ministry report said the policy would allow the government to know the extent of the stock and bring them under tax net.
To ease gold import, 11 measures have been laid out in the policy.
The BB would appoint dealers to import gold bars. The dealers could be an authorised bank, an individual firm, a joint venture or a limited company.
The BB will formulate a guideline for the dealers who would be allowed to bring in gold bars directly.
Jewellers will not be permitted to buy gold from any other sources apart from dealers and customers.
The dealers will be allowed to import gold through bonds, so they have to get bond licences. They will also have to inform the BB about the requirement of foreign currency and obtain no-objection certificate.
The central bank will issue the NOC within 15 days upon receipt of a dealer's application.
Jewellers will inform dealers of their demand and pay them 5 percent in advance.
If a jeweller buys recycled gold from a customer, it has to preserve a photocopy of the seller's national identity card or passport as well as address.