Gold traders decry new export tax rate

The Viet Nam Gold Traders Association has asked the Ministry of Finance to reduce the export tax on gold and gold jewelry from 10 per cent to zero, arguing that the tax was contributing to the nation’s growing trade deficit.

The 10-per-cent rate has only been applied since January 1, when the ministry raised the tax from zero to help stabilise the domestic gold market.

In a proposal sent to the ministry early this week, Gold Traders Association general secretary Dinh Nho Bang said that, since all of the gold in Viet Nam was imported, imposing a 10-per-cent export tax or otherwise limiting gold exports might exacerbate the trade deficit, as well as encourage smuggling and increase the drain of US dollars out of the country.

Bang also said that no country on earth imposed such a high tax on the export of gold, so the high tax caused made-in-Viet Nam jewelry to lose competitiveness and jeopardises jobs in the jewelry industry.

Under Circular No 184, the tax rate is imposed on gold of purity between 99 and 99.99 per cent and gold jewelry of above 99 per cent. Gold bars with purity of under 99.99 per cent are also imposed the tax rate.

Bang attempted to argue that Viet Nam lacked the equipment and technological expertise to assess purity beyond 99.9 per cent, although the effect of the circular is simply to impose the tax on all unprocessed gold of purity greater than 99 per cent. Since the industry worldwide recognises that no gold achieves full 100-per-cent purity, 99.99 per cent is simply synonymous with saying full purity.

Nevertheless, the ministry has stated that it would adjust the circular to make it more consistent with reality.

Phu Nhuan Jewelry, the nation’s leading gold jewelry exporter, has said, meanwhile, that it was indifferent to the tax hike because the firm only exported gold jewelry of 8 karats (33-per-cent purity),14 karat (58.3 per cent) and 18karat (75 per cent).

Asia Commercial Bank’s gold trading centre also said it was free from the effect of Circular No 184, as it only exported gold bars of 99.99-per-cent purity.

Gold lost VND30-50,000 per tael yesterday to trade at VND35.5-35.59 million (US$1,690-1,694) per tael. Kitco spot gold prices late yesterday gained slightly to $1,367.90 per ounce. (One tael equals to 1.2 ounces).

Recent figures from the State Bank of Viet Nam show that Viet Nam imported nearly 71 tonnes of gold over the past 12 years. — VNS

Tags: vietnam gold, Vietnam gold exports, Vietnam gold market