09/05/2015 10:52 GMT+7 Email Print Like 0

Finance ministry imposes new gold tax

Hanoi, May 8 (VNA) - Most domestic jewellery producers have ignored an increased export tax imposed on gold jewelry, as the new duty does not affect their businesses.

Under Decision 36/2015/TT-BTC, the Finance Ministry on May 7 imposed a new export tax on gold jewellery, in which an export duty on gold jewellery that is more than 95 percent pure increased from zero to two percent. The decision, however, maintains zero percent duty on gold jewellery that is 95 percent pure or less.

Previously, the Vietnam Gold Trade Association asked the ministry not to increase the duty, as it was concerned that a new duty would affect local gold businesses. The association said that foreign competitors of Vietnamese jewellery producers, such as China, Thailand, Indonesia and India, not only had better technology, but also were allowed to import gold with no export duty being imposed on gold jewelry.

Representatives from Phu Nhuan Jewelry Co (PNJ) said that PNJ only exported jewellery that is less than 18-karat gold, or 75 percent pure gold, so the new export tax would have no affect on the company.

In fact, Vietnam's jewellery exports have steadily decreased in recent years, from nearly US$3 billion in 2011 to only 670 million USD in 2014.

The country currently has three jewelry exporters of PNJ, SJC and DOJI, however, exports account for a modest part of the firms' total turnover.

The exporters noted that it would be increasingly difficult to compete against other global rivals, as they have to pay a higher price for raw materials for their production since they cannot import gold by themselves to lower input costs. Since May 2012, the State Bank of Vietnam has been the only gold importer in Vietnam to improve their management of the local gold market. However, experts said that another reason for Vietnamese jewellery becoming less competitive was due to claims by some jewellery producers who mislead customers about the purity of gold content.

To better manage jewellery trading, the Government instituted stronger measures last year to control the trading. Further, large jewellery producers with trademarks hope this would help them develop targets for export, especially if the central bank allowed them to import gold for use in producing jewellery.