NBR plans baggage rule change to curb gold import misuse 

The National Board of Revenue (NBR) plans to amend the existing baggage rules to prevent the misuse of gold import opportunities and is considering imposing additional taxes on jewellers.

"There is widespread misuse of gold imports under the existing baggage rules. We will amend the baggage rules," said NBR Chairman Abdur Rahman Khan during a meeting with leaders of the Bangladesh Jewellers Association (Bajus) at the NBR headquarters in Dhaka.  

He also questioned the exemption of advance income tax (AIT) for the jewellery business and said, "AIT will be imposed in this sector, even if only a small amount."  

Despite the opportunity to import gold, commercial imports have been very low, with only 119kg brought in since 2019, according to the Bangladesh Bank.  

However, several times more gold has been brought in under the baggage rules, even though the tax is double on gold imported via baggage rules instead of through regular imports.  

The NBR chairman and senior officials have raised concerns about why more gold is still being brought in under the baggage rules than through official imports.  

Bajus leaders at the meeting called for measures to discourage imports through baggage and a reduction in the existing value-added tax (VAT) rate for jewellers, according to Bajus General Secretary Badal Chandra Roy.  

The NBR chairman said a high-powered committee will be formed to resolve the issue.  

Bajus Vice President Reponul Hasan said diamond imports are being discouraged due to the high tax – 151% at present.  

In this context, the NBR chair said, "Without essentials like rice or fuel, the country cannot function, and we have been informed by the Bangladesh Bank that they are unable to pay these bills due to the dollar crisis." 

He added, "You can understand the kind of chaos that has been in the banking sector."  

When the foreign exchange reserve situation returns to normal, the government will lift such restrictions, he said.  

During the meeting, leaders from the jewellery industry recommended reducing the existing taxes and VAT on jewellers. 

They also proposed expanding the tax net to include those involved in the gold trade nationwide who are currently not subject to VAT.  

Bajus Adviser Ruhul Amin Rasel and senior NBR officials were present at the meeting.