Although the proposed budget for the 2023-24 fiscal year (FY) showed a ray of hope, the expectations of the jewelry industry were not fulfilled. Eleven out of the 12 proposals made by the Jewelers Association of Bangladesh (BAJUS), were not taken into consideration in the budget.
The organization has demanded reconsideration of the 11 proposals of the jewelry businesspersons. At the same time, the organization has conveyed its heartfelt congratulations to the Prime Minister and Finance Minister for their sincere efforts to keep the country's economy on track, including the amendment to the baggage rules.
BAJUS leaders made the plea at a press conference on the proposed budget for the FY24 held at the BAJUS office in Bashundhara City Shopping Mall on Monday (June 5).
BAJUS Vice President and Chairman of the Standing Committee on Non-Tariff and Taxation, Anwar Hossain, BAJUS Advisor Ruhul Amin Russell, BAJUS assistant secretary and vice chairman of the Standing Committee on Non-Tariff and Taxation Samit Ghosh Apu and Member Secretary of the Standing Committee on Non-Tariff and Taxation Pawan Kumar Agarwal attended the event.
Anwar Hossain said: "BAJUS believes that the government should reduce the volume of Tax and VAT apart from ensuring incentives in a bid to make Bangladesh competitive in the global market. It will also contribute to the government's foreign exchange earnings and increase revenue. Additionally, a significant amount of foreign currency reserves will be created."
He said: "By amending the baggage rules, we hope, it will be possible to control the smuggling of gold and currency into the country, which has been happening without any hindrance before due to the benefits of the baggage rules. As smuggling leads to currency leakage, local businesses incur losses. The Finance Minister's proactive step will encourage the legal import of gold."
Regarding the import of gold from abroad within the purview of the baggage rules, he demanded to reduce the maximum limit from 100 grams to 50 grams, stating that this would not only protect the interests of local goldsmiths but also attract buyers toward the local jewelry industry. This step is demanded to safeguard the local goldsmiths and ensure that jewelry items made by the country's goldsmiths is equally recognized in the local and global markets. Therefore, this step by the government is crucial in preserving the importance of local gold artisans.
Anwar Hossain said in the pre-budget press conference, BAJUS had presented 12 proposals, which were the expectations of our jewelers. However, only one of the 12 proposals, has been included in the proposed budget. This has not only disappointed jewellers but also posed a threat to the jewelry industry. In the press conference, he demanded a reconsideration of the remaining 11 proposals.
According to Bajus, the current cost of a bhori of 22-carat gold jewellery is Tk96,694.3500. With a 5% VAT, the price will rise to Tk105,203. This price increase places an additional burden on consumers, the association added.
Bajus believes that high costs of raw materials, production, and import duties on industrial machinery pose significant challenges in meeting the demand for gold in the country.
Currently, the jewellery industry faces import duties ranging from 30% to 60% on various products and machinery, significantly higher than those imposed on other local initiatives. This disparity hinders investment and calls for a reduction in these duties, it added.
Several other claims were made by BAJUS to foster the development of the jewellery industry. These include refraining from installing EDF machines in jewellery establishments to avoid unnecessary harassment, reducing the customs duty on unrefined gold from 5% to 1% conditionally, and imposing a 5% customs duty for IRC holders and VAT-compliant industries instead of the current 10% duty on partially refined gold.
Bajus estimates that there are approximately 40,000 jewellery companies in Bangladesh. Although the reported demand for gold in the country is 40 tonnes, the association argues that the actual demand is much higher.
For making gold ornaments, import of raw materials and machinery, all types of duties should be exempted, along with providing a tax holiday for 10 years, the association also demanded.
BDST: 1514 HRS, JUNE 05, 2023