Thursday, 17th August 2006 (3043 views)

The Vietnam Gold Business Association (VGBA) has reported that it is to reduce the import tax it places on gold ingots.

Vietnam's Ministry of Finance said that it was to halve the tax from one per cent to 0.5 per cent to support the Vietnamese commitment for World Trade Organisation (WTO) accession.

Import tariffs on gold grains and other raw gold material will remain unchanged at 0.5 per cent and the Vietnamese government hoped to keep taxes low in order to foster favourable conditions to develop the precious metals industry.

At the same time there have been calls from the jewellery sales sector in the south-east Asian country to revamp the valued-added tax charging system to allow sellers to hold back on paying the VAT until after the item was sold.

Critics of the current system say it places an undue burden on jewellers to sell items quickly in order to prevent any losses on the items.

High-end products sometimes take several months to sell, analysts said, and therefore the ten per cent of VAT added to the import cost of the item was costing traders money before they had recouped anything from the sale.

Advocates of a changed system also noted that by changing the rules so jewellers would not have to pay the tax until the item was sold would encourage a higher standard of jewellery imports as there was less risk and lower capital outlay involved.

 

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