Author: Paul Ploumis
08 May 2015 Last updated at 08:28:26 GMT
NEW DELHI (Scrap Monster): The Vietnamese Ministry of Finance (MoF) has imposed new export tax on gold jewellery. As per Decision 36/2015/TT-BTC, the export duty on gold jewellery of purity exceeding 95% is being increased from 0% to 2%. The exports of gold jewellery that is 95% pure or less than that will continue to enjoy 0% tax.
According to industry sources, the rise in duty is unlikely to affect most businesses as many of them are indulged in exports of gold jewellery with purity less than the mentioned levels. The county has only three major exporters of gold jewellery. The export business accounts for only a minor share of their total business revenue. For instance, one of the major jewellery exporters in the country-Phu Nhuan Jewelry Co (PNJ) confirmed that the MoF decision would not have any material impact on the company as it exported only 18-carat gold which conforms to 75% purity level.
Earlier, Viet Nam Gold Trade Association had requested MoF not to increase duty on gold exports on grounds that hike in duty may badly affect domestic gold businesses in the country. The Association had pointed out that such a measure would leave the Vietnamese local businesses in a difficult situation as its major competitor countries such as China, Thailand, Indonesia and India does not have any export duty in place.
The association noted that Vietnam’s gold jewellery exports have declined sharply over recent years. The exports which had totaled nearly $3 billion in 2011 have plunged to $670 million in 2014. Stiff competition from other Asian countries has led to sharp drop in gold exports from Vietnam. Moreover, input costs have risen multifold, as exporters are not permitted to import gold on their own. Also, there has been rising concerns about purity content in Vietnamese gold jewellery, which the association terms as ‘baseless’.