Transparency International Bangladesh has placed a draft policy on gold trade to the government suggesting reduction of import duty, full opening of import in phases and bringing all gold traders under licence for ensuring discipline, transparency and accountability in the sector.
It also suggested the government for offering legality of all gold and gold ornaments irrespective of their sources through declaring a general impunity.
Traders will be able to make their gold legal within a timeframe by paying taxes and the government will confiscate the unregistered gold and ornaments after the deadline.
The government will also encourage export of gold ornaments through giving incentives and duty rebate on import of gold for export oriented traders, the draft policy stated.
Berlin-based anti-corruption watchdog Bangladesh chapter has recently placed the draft before finance minister AMA Muhith following his request as the ministry took a move to frame a policy for the sector after recent surge of gold smuggling into the country and exposure of dark side of the country’s gold business.
Customs Intelligence and Investigation Directorate of the National Board of Revenue alone seized around 1,200 kilograms of smuggled gold in the last three years at international airports of the country.
The directorate seized 540kg gold from Apan Jewellers outlets in May as the business house failed to furnish documents of the sources of the gold during drives.
No businesses will be able to furnish documents as the jewellers in the country depend on informal supply chain, including smuggling, for gold to meet the domestic demand in the absence of easy legal system for its import.
There is no policy on gold trade and regulations though the precious metal is very important in trade and investment.
In the draft, the TIB proposed to make obtaining licence mandatory for gold and gold ornaments traders within a deadline.
Traders must have taxpayers’ identification numbers.
Gold trade will be brought under value-added system and transactions above Tk 1 lakh would be made through banking channel.
Gold mortgage business will also come under legal framework.
According to the draft, a gold warehouse will be established in the country under the supervision of Bangladesh Bank which will sell gold seized by different authorities to the traders.
Initially, traders will be allowed to import gold needed to meet their annual demand. Bangladesh Bank and the National Board of Revenue will monitor the issue.
Finally, the government can make the import open considering the economic strengths of the country.
The government will also increase capacity of agencies including customs and law enforcement agencies for preventing gold smuggling into the country and for using the country as a corridor.
The TIB also estimated, based on information from different sources, that the overall annual demand of gold might be around 35-40 tonnes for the gold industry.
Of which, around 10 per cent of demand is met from recycled gold.
‘The gold industry needs 24-32 tonnes of new gold for domestic market,’ it said, adding that the lion’s share of the demand of fresh gold may come illegally into the country.
There are also allegations that international smugglers use Bangladesh as a corridor of gold smuggling.
TIB executive director Iftekharuzzaman recently told New Age that they framed the draft following a request from finance minister AMA Muhith in June.
He said that the draft eyed on ensuring transparency, accountability and discipline in the sector and make the business sustainable.
Any smuggling-based business cannot be sustainable, he said, adding that gold business is a profitable business with huge potential in both local and global market.
A policy on gold trade including import is needed considering the above mentioned issues, he added.
‘We have recommended the government for finalising the policy titled Gold Import, Collection, stockpiling, jewelry making, recycling, transactions, mortgage business and export, after consultation with the relevant stakeholders including jewelers,’ he said.
Officials of the finance ministry said that the revenue board was working on formulating the policy.
The NBR will consider the drafts placed by TIB and Bangladesh Jewelers Association while finalising the policy, they said.
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