Bangladesh government mulls to cut existing 5% taxes on gold imports to encourage the import on legal routes through authorised dealers, sources from the finance ministry confirmed.

Gold smuggling is on the rise in the country recently due to the existing tax incidence, they added.

An international passenger is allowed to bring up to 234 grams of solid bar, paying Tk2,000 in tax against one bhori (11.66gm) of the imported gold, under the Baggage Rules of Bangladesh Customs.

On the other hand, a passenger can bring up to 100 grams of gold ornaments duty-free. He or she has to make sure there are no more than 12 pieces of a single type of ornament.

Bangladesh Jeweller’s Association (BAJUS) senior vice president Gulzar Ahmed hailed the government’s plan to cut the advance tax on gold imports.

“We have requested the NBR to reduce our VAT to 2% from 5%. If the authorities make any positive move in this regard, it will encourage customers to pay VAT,” he told.

Bangladesh formulated its first-ever gold policy in 2018, aimed at boosting the import and export of gold and ensuring transparency in its trade by bringing the gold sector of the country within a regulatory framework. The policy came into force on 29 October 2018.

This step led to some private entrepreneurs being eager to import gold in line with government rules and regulations.

According to sources in the Ministry of Commerce and Industry, Bangladesh has a demand for gold up to 40 tonnes annually. Most of the demand is met by smuggled gold and the rest by recycled gold.