The Viet Nam Gold Traders Association has called on the Ministry of Finance to discard its plans to tax export of gold of less than 95 per cent purity, claiming it would badly affect the industry.

The ministry is drafting a decree to amend existing ones on export tariffs, preferential import tariffs, lists of goods and flat-rate duties, mixed tariffs, and out-of quota import tariffs.

In this, it proposes to impose export tax of gold 2 per cent on all gold jewellery irrespective of purity. Currently, only gold jewellery of more than 95 per cent purity is taxed.

According to the association, if the tax is imposed businesses would no longer be able to export jewellery since they are not allowed to import gold bullion while its price in the domestic market is always VND6-8 million (US$262.7 – 350.6) per tael (37.5gm) higher than in the international market. This makes it very difficult for Vietnamese companies to compete with their foreign rivals, it said.

Gold, silver and gemstone trading enterprises in Thailand, Indonesia, Malaysia, and Singapore enjoy advantages such as no import or export tax, and more modern equipment and technology, it said.

The new export tax could lead to an increase in smuggling to evade it, it warned.

In recent years major gold companies such as DOJI, SJC, PNJ, and Phu Quy have invested large amounts of money in production plants.

Thanks to this and the Government’s relatively reasonable tax policies, Viet Nam achieved decent jewellery exports, it added.

Gold exports were worth $2.6 billion last year. — VNS