Gold traders too demand incentives

Gold traders in Bangladesh have requested the government for incentives in exporting gold for the growth of the sector and earning more foreign currencies in the same way as many export-oriented industries including RMG are receiving at present.

At a pre-budget discussion on the budget for the fiscal year 2021-22, organised by the National Board of Revenue (NBR) on Sunday, president of the Gold Manufacturers and Exporters Association Anwar Hossain also demanded that the import and export of gold should be facilitated.

However, opposing the demand, NBR Chairman Abu Hena Rahmatul Munim said, "Even though many opportunities were given for importing gold legally, there was no benefit. Policy support alone is not enough. There are many more issues. If we cannot solve those issues, nothing [good] will happen in this sector."

"Last time gold importers were given so many benefits but how many of them imported gold? Transparency did not come in the domestic market and now there is a lot to talk about the international market," he added.

The country has an annual demand of 20-24 tonnes of gold but only 10% of it is collected by melting old gold ornaments. The remaining 90% comes through baggage rules and smuggling.

To prevent illegal import of gold, the government formulated a gold policy in 2019 by allowing importing gold commercially with a dealership license.

In 2019, the Bangladesh Bank issued licences to 19 companies, including a bank, to import gold legally. At present, a supplementary duty of Tk2,000 is levied on every ounce of gold imported.

After getting the licence, two companies imported 25,000 grams of gold last year, but the import was stopped due to various complications.

In the pre-budget discussion organised by the NBR, gold ornament exporters said that even though dealership licences were issued, more gold was being imported illegally due to complications in importing gold paying customs duties.

Gangacharan Malakar, former president of the Bangladesh Jewellers Association, said one must have at least Tk100 crore to be a gold importer but most of those licensed by the Bangladesh Bank do not have that capability.

Apart from gold traders, representatives from 15 sectors including agro-processors, leather, seed, sweet, bakery and paint industries took part in the budget discussion.

Representatives of the leather goods and footwear industry demanded a general bonded warehouse facility for all companies and a reduction in corporate tax rates to sustain the competitive export market of leather goods.

The NBR chairman opposed the demand of the leather industry owners to increase the tax holiday facility for the sector.

Rahmatul Munim said that even after providing policy support, the leather industry is not able to benefit in the export market as it is not compliant. The sector is in turmoil because of its own problems, not tariff barriers. Even if incentives are given at the expense of revenue, it will not work. As a result, these opportunities will not be given.

The Seed Importers' Association requested the withdrawal of unreasonable conditions to ensure duty-free facility for import of various grain seeds including potato, wheat, maize, chilli, watermelon to ensure fair price of the crop.

Mohammad Jalal Uddin, president of the Bangladesh Bread, Biscuit and Confectionery Manufacturers' Association, has proposed to exempt hand-baked bread, bun bread, biscuits and cakes (excluding party cakes) from VAT.

"Considering the employment of unskilled and uneducated unemployed youth in the hand run bakery industry, the development of this industry and Covid-19 epidemic, I strongly demand to keep it completely VAT free in the national budget for 2021-2022," he added.

The NBR chairman said, "We want to give importance to local industries in the budget to strengthen the domestic economy. We are working on which sectors will help increase local production and reduce dependency."