As there has been no policy on gold import for 47 years since independence, transparency and accountability cannot be ensured in this sector, which is why the government is being deprived of substantial revenue.
However, Finance Minister AMA Muhith announced that `national gold policy` will be delivered in the upcoming budget.
Work is underway to make the policy under the supervision of commerce ministry and it is supposed to be finished by June.
As per Import policy order 2009-2012’s article 25 (23), gold and silver can be imported after fulfilling the condition in line with section 7 of Foreign Exchange Regulation Act-1947
Gold traders’ association-- Bangladesh Jewelers Samity President Gangacharan Malakar said: “We have not been asked about the source of gold so far. As a result many took the advantage more or less.
“We paid VAT and income tax without informing the source of gold. But now we want to import gold legally. We have been demanding it for 47 years.”
Also Read- What are the barriers in importing gold?
The businessman also said: “We called on the government frequently to give us the opportunity to import gold. We have been demanding for a policy for 20 years.
“We hope the policy will be made in the upcoming fiscal year.”
On February 4, a seven-member committee was formed with an additional secretary to the commerce ministry as its convener.
The association’s General Secretary Dilip Kumar Agarwala said: “Our association has been demanding for gold import for 47 years. We proposed that Bangladesh Bank imports gold and sells them to traders by adding premium. We can also get gold through state-owned or private banks or dealers.”
He also shared his recent experience of applying for importing gold. “It was a bitter experience. I did not get permission from Bangladesh Bank even though I tried hard.
Also Read- Why do traders buy smuggled gold?
“Earlier I obtained import registration certificate from Import-Export Regulations Office and opened a letter of credit (LC) after getting no objection certificate from the commerce ministry. But none of these worked out.”
But gold import is not banned in Bangladesh.
As per Import policy order 2009-2012’s article 25 (23), gold and silver can be imported after fulfilling the condition in line with section 7 of Foreign Exchange Regulation Act-1947. In this case one needs to obtain no objection certificate from Bangladesh Bank.
Besides, passengers can bring 100 gram gold free of duty and gold bar weighing 234 gram by paying Tk3,000 for 11.65 gram per gold under the baggage rules of the National Board of Revenue (NBR).
But gold traders are not interested in importing gold legally on the pretext of a number of complications such as the central bank’s permission and high duty charges. So the demand is being met up through smuggled gold.
Debasish Chakraborty, spokesperson and executive director at Bangladesh Bank, said: “Gold can be imported by following due process as per Foreign Exchange Regulation Act-1947. If anybody applies for LC then Bangladesh Bank issues either objection certificate or no objection certificate considering public interest.”
He said since gold prices keep changing in the global market it becomes difficult to fix the price during the opening of LC.
If specific information is not mentioned in the LC while fixing import price then Bangladesh Bank cannot give permission to open LC for gold import based on incomplete information, the official said.
Gold was an import-based commodity back in 1947. One had to get permission from the central bank to import gold. The whole process was easy that time.
Association’s General Secretary Dilip said that before 1971, Bangladesh Bank used to import gold through two dealers and then sold them to traders. The system did not continue after 1971.
After independence people were able to bring gold upto 10 kg by announcing in the airport under baggage rules in expatriate quota. In 1996, the quantity was lowered to 5 kg and the quantity was cut down to 2 kg in 2000. More embargos were imposed in 2010.
Dilip said they had to pay Tk12, 500 as tariffs to the government for per kg gold until 2015. But since 2015-16 fiscal the amount escalated to TK300,000 per kg gold.
The government earned Tk40-50 lakh per day from gold sector when the tariff was Tk12,500. But now the government does not earn a single penny when the amount rose. It also gave rise to smuggling of gold.
According to a survey, Bangladesh has a demand for gold of 30-40 tons. But the whole process-- where the gold is coming from and who are behind the source-- remains non transparent.
Gold and gold ornaments deposited to the traders are not registered as well.
Transparency International, Bangladesh (TIB) said about 90% of gold demand is met up through smuggling. But the association’s President Gangacharan said the demand is less than that—7-9 ton.
It is possible to meet the total demand through import. But instead the demand is met up through smuggled gold.
Gangacharan said some gold come through baggage rules. The rest of the demand is met up through old gold inside the country.
Former NBR chairman Abdul Mazid said: “Gold business is not transparent. The traders of this industry meet a major demand of gold from smuggled gold. They also collect gold brought from abroad under baggage rules.”
He said it would not be possible to bring transparency to this sector without the government’s initiative.
According to gold traders’ association, there are about 128,000 gold traders in Bangladesh. Of them there are 10,000 traders in Dhaka.
This article was first published on banglatribune.com