The cabinet has 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 absence of a policy meant there was no scope to legally feed the ever-increasing need for gold, which is, according to a study, 18 to 36 tonnes annually.
The main aim of the policy is to increase gold ornament export, Cabinet Secretary Shafiul Alam told reporters after the cabinet meeting chaired by Prime Minister Sheikh Hasina yesterday.
He said in the first phase of the policy implementation, there would be no duty on gold imports, just VAT. At every stage of the import and sale, hallmarks on the bars would be mandatory and the ratio of alloys used would be specified.
He also said within six months of the policy issuance, traders would declare their stocks of gold and other precious metals to the VAT authorities. Every month, they would have to submit balance sheets of their sales to the VAT authorities.
Jewellery traders had been complaining that the central bank had not auctioned the gold seized during smuggling for ages, limiting the opportunity to buy gold legally.
And the demand was being met mostly through smuggling, leading the government to count billions in lost revenue.
According to a Transparency International Bangladesh report, the government suffers a revenue loss between Tk 4.87 billion and 9.74 billion annually due to the absence of a legal way to import gold.
The draft of the gold policy cleared by the cabinet on Wednesday says the Bangladesh Bank will approve dealers to import gold.
In the world market, India supplies 80 percent of the 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 just $672.
According to commerce ministry documents, Bangladesh’s annual demand for gold is between 20 and 40 tonnes and almost 80 percent of it is met by smuggled gold and the rest by recycled gold.
Between the country’s independence and early 2015, 2.2 tonnes of seized illegal gold worth $90 million had been added to the foreign currency reserves.
Big hauls of the precious metal make headlines and indicate that gold is often smuggled into the country.
The cabinet secretary said the amount of gold one could bring into the country in his or her luggage, under baggage rules, could be increased.
Air passengers will also be able to bring up to 234 grams gold in their luggage, according to the cabinet secretary.
The amount would rise in the final policy.
The draft proposes no duty for the air passengers to bring up to 100 grams gold, he added.
Making of Policy
The finance ministry last year requested the Transparency International Bangladesh (TIB) to come up with recommendations for formulating a gold policy.
Later, the finance ministry sent the recommendations to the commerce ministry that formed a nine-member committee with representatives from the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), the TIB, gold traders, and related ministries and agencies.
The committee then formulated the draft policy and in May the cabinet committee on economic affairs approved and forwarded it to the cabinet.
The cabinet yesterday also approved Customs Act, 2018, and the National Environment Policy, 2018.
The cabinet secretary said in 1992 the first National Environment Policy was enacted where 15 sectors were identified for preservation. The number now has been increased to 24, including land management, water resource management, hill preservation, protection of the environment through a public-private partnership initiative.