Govt proposes to withdraw advance tax on gold imports

The government has proposed to withdraw the existing advance tax on the import of gold to encourage imports through the formal channel and clamp down on the smuggling of the precious metal.

At the same time, the government recommended cutting VAT to 5% from the existing 10% for jewellery traders.  

Finance Minister AHM Mustafa Kamal on Thursday said, "I propose to withdraw advance tax on import of gold with a view to encouraging import of gold through formal channel and curbing entry of smuggled gold into the country." 

The Gold Policy-2018 came into force on 29 October 2018 to increase government revenue by bringing the gold sector of the country within a regulatory framework, he said at the Parliament while proposing the annual budget for 2022-23 FY.

He also noted that the move will hopefully result in the flourishing of country's jewellery industry and increase the tax revenue of the government.

Earlier on 7 June, Gulzar Ahmed, senior vice president of the Bangladesh Jewellers' Samity (BAJUS), hailed the government's move to scrap the advance tax on gold imports, saying it will be beneficial for both the industry and consumers.

"We have requested the NBR to reduce our VAT to 2% from 5%. If the authorities make any positive move in this regard, it will encourage customers to pay VAT," he told The Business Standard.

Earlier, the government formulated the first-ever Gold Policy-2018 for the country, aimed at boosting the import and export of gold and ensuring transparency in its trade by bringing the gold sector of the country within a regulatory framework. 

This step led to some private entrepreneurs being eager to import gold in line with government rules and regulations.

Finance Minister AHM Mustafa Kamal has placed the Tk6,78,064 crore national budget for FY23 at Jatiya Sangsad according to top priority to safeguarding marginal people from inflation fuelled by the Russia-Ukraine conflict.

This is the fourth budget of the third consecutive term of the government led by Prime Minister Sheikh Hasina and also the overall 51st budget of the country.

The proposed budget is Tk74,383 crore higher than the original budget size for the FY2021-22 fiscal year, which was Tk6,03,681 crore.