News
As gold reaches sky-high, traders push for tax cut to ease price
View(s):By Dilushi Wijesinghe
Sri Lanka’s gem and jewellery industry has renewed its call to the government to reduce the import duty on gold from 15% to 5% to offset soaring prices in the world gold market that have fuelled local prices to unprecedented levels, disrupted supply, and left small jewellers struggling to survive.
“We have given plenty of proposals to the Finance Ministry. They are receptive, but there is no follow-up action or decision made so far,” Ceylon Gem and Jewellery Traders Association (CGJTA) chairman Rizwan Nayeem told the Sunday Times.
The duty, implemented in April 2018 to slow down the rapid spike in gold imports and to discourage gold smuggling to countries like India, has hurt legitimate businesses while doing little to curb illegal movement, according to industry representatives.
Internationally, gold prices have surged amid large-scale institutional buying, pushing global rates to record highs. But the local impact has been magnified by policy missteps, with Sri Lankan gold priced far above international levels, making it unaffordable to most consumers, industry sources claim.
“Our proposition is to bring down the duties from 15% to 5% so the government will make greater revenue on bigger volumes. And the Sri Lankan general public will be able to find some gold and save money by investing in gold, which will be very good for them in the long term and also for the country,” Mr Rizwan said.
“If this does not happen,” he warned, “the industry will die off. Sri Lankans will not have access to gold at competitive prices, so people will be just holding on to paper money,” he added.
With the wedding season underway, demand for jewellery remains strong but constrained by high prices. “Sri Lankans would love to buy as much gold jewellery as possible,” Mr Rizwan said. “The only barrier now is affordability.”
(See our business section for a related story.)
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