The government is considering relaxing regulations to facilitate gold bar import through the formal channel for meeting the local demand for the precious metal and to discourage gold smuggling into the country, finance ministry officials said.
Finance minister Abul Maal Abdul Muhith will soon hold meetings with stakeholders including ministers concerned and traders to finalise decision about the issue, they said.
The move came after Bangladesh Jewellers Samity (BAJUS) submitted to the finance minister a three-point charter of demands that includes framing a policy on gold bar import in the legal channel and relaxing the existing provisions.
The National Board of Revenue at its monthly budget implementation forum meeting on February 7 asked its customs, value-added tax and income tax wings to take preparations in this regard.
NBR officials said that primarily they were in favour of relaxing the requirement of taking permission from Bangladesh Bank for gold bar import but the NBR’s position in this connection would be finalised by the members (policy) of its three wings.
Currently, traders are allowed to import gold bar with taking prior approval from the BB, they said.
But there are one or two instances of gold bar import by traders in this process.
In a letter to the finance minister, BAJUS general secretary Dilip Kumar Agarwala said that traders could not import gold bar due to complexities in the banking channel including taking permission from the central bank and completing the procedures of letter of credit.
In addition, an international passenger can bring gold bar up to 234 gram (20 bhori) by paying Tk 3,000 specific duty and 4 per cent advance trade VAT for each bhori of gold under baggage rules.
The government in the fiscal year 2014-2015 increased the duty from Tk 150 a bhori to make the duty structure consistent with neighbouring India and prevent gold smuggling.
But gold smuggling did not come down as, policy makers, customs authorities and traders suspect, Bangladesh is being used as a passage for gold smuggling destined for India.
BAJUS demanded allowing import of at least 10 kilogram of gold bar with a reduced duty rate at Tk 1,000 for jewellery traders and Tk 2,000 for general traders and removing complexities in the banking procedures.
It requested the government to ease the procedures including letter of credit system for importing gold bar.
The association also sought a policy on gold import and gold export.
The association said that they met the demand for gold ornaments in the country with recycled old ornaments and gold brought by passengers under baggage rules.
Regarding the association’s proposal, in a note to NBR chairman Md Nojibur RAhman, the finance minister termed the proposal as timely and acceptable.
Gold bars are coming into the country through various means and are widely smuggled to India, he said.
‘We want to get rid of the problem and so, I am thinking to give legal recognition to gold bar import considering the reality,’ he wrote.
He also decided to hold open discussions with industries, commerce and planning ministers, advisers to the prime minister on economic and international affairs, state minister for planning and finance, Bangladesh Bank governor, presidents of the Federation of Bangladesh Chambers of Commerce and Industry and Women Chamber of Commerce and BAJUS.
Officials of the revenue board said that traders could import gold bar up to 2 kg after getting BB permission.
But no traders took the facility in recent years, they said.
The conditions related to taking permission from the BB for gold bar import through opening LC can be relaxed but it would not be wise to allow them import of the commodity under baggage rules, they said.
The opportunity can only be given to VAT-registered jewellery traders, they added.
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