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By Anh Vu, Thanh Nien News
Starting this Saturday, the Ministry of
Finance will begin to impose a 10 percent export tax on jewelry that has more
than 80 percent gold content, despite objection from gold traders.
The tax previously applied to jewelry
containing more than 99 percent gold.
According to the State Bank of Vietnam,
some traders reprocessed their jewelry products to have gold content of less
than 99 percent in an attempt to avoid the tax. As a result, the central bank
proposed a change in the policy to stop the practice.
Deputy Minister of Finance Do Hoang Anh Tuan told Thanh Nien that the ministry supported the proposal. Many
gold traders had taken advantage of the old policy to avoid tax payments, he
said.
Last week the Vietnam Gold Traders
Association protested the proposal, arguing that exporters would continue to
try to lower their gold content to be eligible for a zero tax rate. If
traders cannot make a profit due to higher production costs, they may engage
in smuggling, the association warned.
Nguyen Thanh Truc, chairman of Agribank Gold
Corporation, said the new tax rate would not affect domestic gold prices, but
it could lead to uncontrollable smuggling of the metal out of the country.
Other experts said export restrictions
would cause an imbalance of gold supply and demand in the market.
Gold outflows are likely to get stuck
and the market will be unmoving, they said.
Gold exports reached US$1.8 billion in
the first seven months of this year as traders boosted shipments of the metal
to around 36 tons, to take advantage of the gap between local and world
prices.
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