Bangladesh Bank, NBR to issue separate directives this month
Gold import will soon begin for the first time in the country as the authorities have finalized regulations to facilitate bullion import without any customs duties, top sources at the Bangladesh Bank and the National Board of Revenue (NBR) said.
The move comes after the cabinet in early October approved the Gold Policy to formalize the sector, tighten money laundering, gold smuggling, and to facilitate export of gold ornaments.
Currently, local gold demand which is between 30 and 40 tons a year is fully met by smuggled gold, industry people said.
According to recent data of Transparency International Bangladesh, the government suffers revenue loss of between Tk 487 crore and 974 crore annually due to the absence of a legal way to import gold.
According to sources, Bangladesh Bank will issue a guideline soon for appointing gold dealers. Banks, individually-owned firms, joint ventures, or limited companies will be eligible to become gold dealers.
“Only gold dealers will be eligible to import gold,” an executive director of the central bank told the Dhaka Tribune.
“We are going to issue the guidelines latest by the end of this month.”
The minimum capital required to become a dealer has been set at Tk 1.0 crore, it was learnt.
Dealers will have to import gold with bonds issued by the revenue board, sources said.
The existing rules allow import of gold upon central bank approval. But in reality, gold has never been imported through legal channels since independence, NBR sources said.
Senior officials concerned at the NBR said they have finalized a Statutory Regulatory Order outlining duties for gold imports. They said gold import will be allowed without any customs duty, but a value added tax (VAT) will be imposed.
Authorities seized 1.674 tons of smuggled gold at airports in the past four financial years, according to the TIB report.
Currently, a passenger can bring 100 grams of gold to the country without duty, and 234 grams paying duties, under the baggage rules of NBR.
On October 3, the cabinet approved the first-ever gold policy for the country, aiming to make import and export of the precious metal easy, stop its smuggling, and ensure transparency in its trade.
The policy would help grow the export of gold ornaments from Bangladesh, industry people said.
In the world market, India supplies 80 percent of handcrafted gold ornaments, according to the Bangladesh commerce ministry. It said in 2016, India exported gold ornaments worth $42 billion, while Bangladesh officially exported ornaments worth only $672.
The policy proposes a number of incentives to increase the export of gold ornaments, including tax benefits, especially for handcrafted gold ornaments.
Gold ornament makers would also be given subsidies for exporting gold items, be it handcrafted or machine made, the policy said.
Duty benefits would be given to exporters who import bars and then export gold ornaments.
Land would also be allotted to exporters for setting up factories in special economic zones.
Bangladesh Bank would set up a central information bureau that would keep information on the annual demand for gold, its local trade, import and export, revenue collection, seizure of gold, its sale on auction, and other relevant data, the policy said further.