Ministry refuses to cut gold export tariff

The Ministry of Finance has turned down a proposal by the Viet Nam Gold Traders Association to reduce the export tax of gold and gold jewellery, announcing yesterday that the current tax rate of 10 per cent would remain in effect.

In reaffirming the tax rate, the ministry reminded the association that the purpose of the tax was to limit the export of precious metals and to promote natural resources conservation over gold exploitation.

The ministry also said that, before raising the tax rate from zero to 10 per cent in January, the ministry had consulted with the State Bank of Viet Nam and relevant agencies on current gold export volume and the optimum tax rate.

Under Circular No 184, the export tax is imposed on gold of purity between 90 and 99.99 per cent and gold jewellery of above 99 per cent purity.

The Viet Nam Gold Traders Association had last week urged the ministry to reduce the tax rate from 10 per cent to zero, arguing that the tax was contributing to the nation’s growing trade deficit and destabilising monetary policy.

The association’s general secretary, Dinh Nho Bang, had argued that, since much 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.

Olympus Pacific Minerals Inc, which operates two gold mines and exports 1.5 tonnes of gold every year, also disagreed with the tax and noted that gold exporters paid a double duty, including a 15-per-cent mineral tax on top of the 10-per-cent gold export tax.

No company could export gold under the circumstances and remain competitive, Bang said, arguing that the tax was jeopardising jobs in the jewellery industry.

But both Phu Nhuan Jewelry and Asia Commercial Bank’s gold trading centre said that they were indifferent to the tax because the firms only exported gold jewellery of 8 carats (33-per-cent purity),14 carats (58.3 per cent) or 18 carats (75 per cent), or gold bars of 99.99-per-cent purity.

Gold yesterday was up VND150,000 to VND35.33-35.39 million (US$1,681) per tael, about VND1.4 million ($66.5) higher than the prevailing global price. — VNS

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