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Zero export tax doesn’t satisfy gold jewellery makers

Update: September, 08/2016 - 05:00
Decree No. 122/2016/ND-CP sets a free export tax for gold jewellery and other gold articles with less than 95 per cent gold content from September 1. — Photo
Viet Nam News

HÀ NỘI – Gold jewellery and other gold articles with less than 95 per cent gold content enjoy zero export duty rates from September 1, under Decree No 122/2016/NĐ-CP.

Under the circular, enterprises exporting gold jewellery, goldsmiths’ wares and other gold articles under subheadings 71.13, 71.14 and 71.15 of the export tax schedule, which have under 95 per cent gold content, can declare export tax at zero per cent if they can show test results confirming the percentage of gold content is below 95 per cent, issued by organisations in charge of assessing gold content in jewellery and goldsmiths’ wares.

The oganisations that can assess gold content are Quality Assurance and Testing Center 1, Quality Assurance and Testing Center 3, Doji Institute & Laboratory for Gemology and Jewellery, A Chau Commercial Bank-Gold Center or an organisation appointed by the Directorate for Standards, Metrology and Quality.

In 2015, the Finance Ministry, under Decision 36/2015/TT-BTC, imposed a new export tax on gold jewellery, following the increase of export duty from zero to two per cent on gold jewellery with purity of over 95 per cent.

While goldsmiths in Việt Nam welcomed the decision, most said it would not lead to much improvement in local jewellery exports, which have declined in recent years. Export value dropped from nearly US$3 billion in 2011 to only $670 million in 2014.

According to representatives from Phú Nhuận Jewelry Co (PNJ), the firm only exported less than 18-karat gold jewellery, or 75 per cent pure gold, therefore the decree would not benefit the firm.

Meanwhile, gold jewellery makers said the free import of gold material would be more helpful for them to compete against global rivals. Currently, they have to pay a higher price for raw material required for production since they cannot import gold on their own to lower input costs.

To control the local gold market, since May 2012, the State Bank of Việt Nam has been the only gold importer in the country. To better manage jewellery trading, the government instituted stronger measures last year to control the trading.

In box

Local gold prices followed the international trend, soaring yesterday. In the global market gold rose to a fresh two-and-a-half-week high after gaining nearly 2 per cent in the previous session, as disappointing US economic data reinforced expectations that the US Federal Reserve will keep rates on hold in September. On, gold increased by US$9.5 to reach $1348.9 per ounce (or $1,625 per tael).

In the local market, Sài Gòn Jewellery Joint Stock Company added VNĐ220,000 to each tael of SJC gold to reach VNĐ36.56 million ($1,637), while gold companies Bảo Tín Minh Châu and DOJI in the north and Phú Nhuận Jewellery in the south also added between VNĐ280,000 and VNĐ300,000 per tael.

In Hà Nôi, DOJI saw more gold buyers in the day, who believed the yellow metal was gradually regaining the attention of local investors in Việt Nam.

Meanwhile, although the dollar tumbled in the global market, the greenback rate in the local market was stable. The buy/sell rates of the greenback in Vietcombank were VNĐ22,260/VNĐ22,330. In other commercial banks, such as BIDV, Vietinbank, Techcombank, ACB and Eximbank, the buying rates were between VNĐ22,255 and VNĐ22,280 and the selling rates were between VNĐ 22330 and VNĐ22,380, respectively. — VNS

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