The cabinet committee on economic affairs on Wednesday okayed the draft of the first-ever gold policy aiming at streamlining the local market and easing the import and export of the precious metal.
A meeting of the cabinet committee on economic affairs chaired by finance minister AMA Muhith approved draft of the policy forwarded by commerce ministry.
The draft of the gold policy would be placed before the cabinet for approval.
Gold has never been imported through the existing rules of import of gold, but 80 per cent of the annual demand for 20-40 tonne is met by smuggled gold and the rest from recycled gold, according to the draft of the policy.
The trend is not only depriving the government of a huge amount of revenue but also creating scopes for money laundering and proliferation of black money, it said.
Muhith told reporters that absence of a gold policy was creating many problems including smuggling.
Replying to a question, he said that the import duty on gold would be fixed and the amount would not be high.
Amount of tax against the import of gold is a very crucial issue of the policy, said Bangladesh Jewelers Association president Ganga Charan Malakar.
He said that the main aim of the policy would remain unfilled if the tax was high.
The high amount of tax would create big gap in price of gold between local market and other countries including the United Arab Emirates and eventually discourage import through proper channel.
According to the draft of the policy, licensed gold jewellers would purchase imported gold from at least two authorised dealers to be appointed by Bangladesh Bank.
The draft also proposes provisions making mandatory for the jewellers and gold businesses to get licence, certificate and registration and introduce electronic cash register.
The jewellers and gold businesses would require preservation of national identifications for buying recycled gold.
They would also require legalising gold under their current possession with the payment of tax.
The draft gold policy that would be sent for approval from the cabinet also recommended establishment of lab for ensuring quality of gold, introduction of hallmark and cash memos with detail description of ornaments for protecting the interest of consumers.
The draft of the policy also recommended bringing about changes in the present baggage rules by allowing individual passengers to carry highest 100 gram gold ornament twice in a year and licensed businesses highest two kilogram.
According to the draft, the export potential of gold ornaments has never been explored by the local businesses because that is less lucrative than the highly profitable local market.
Bangladesh exported gold ornaments of $672 million in 2014-15, compared to export of $42 billion by India in2016.
For encouraging export, the draft suggested that the entrepreneurs should be given incentives like duty drawback facility, rationalisation of bonded ware-house facility and lands in special economic zones.
Besides, the draft said that the Bangladesh bank would create a data-base containing demand and sales of gold, import and export, jewellery shops and amount of confiscated gold.
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