A file photo shows a customs official holding a gold bar seized at Hazrat Shahjalal International Airport in Dhaka. The country’s gold traders have started to import gold through the legal channel for the first time ever, bringing an end to its complete dependency on gold entering the country through informal means. — New Age photo
The country’s gold traders have started to import gold through the formal channel for the first time ever, bringing an end to its complete dependency on gold entering the country through informal means.
As per the Bangladesh Bank data, two entities, which hold the licence to import gold, have so far imported 25 kilograms of gold after they were issued the licences in December last year.
The entities are Aroosa Gold Corp and Diamond World.
Aroosa Gold Corp imported 14 kilograms of gold after securing the central bank’s approval while Diamond World imported 11 kilograms of the metal in June this year.
Traders said that the demand for the precious metal had been on the rise in recent months as savers were left with no other means of safe investment opportunities after the coronavirus outbreak, prompting gold traders to bring in gold through the legal channel.
Gold prices skyrocketed across the globe to a record high during the outbreak as people began regarding it as a safe means of investment.
In Bangladesh, the prices of a bhari (11.664 grams) of 22 carat gold increased to Tk 74,008, a bhari of 21 carat gold to Tk 70,858 and that of 18 carat gold to Tk 62,110.
The country’s communication with gold sourcing countries has also come down to a minimum after the outbreak, they said, adding that the disruption in communication had resulted in an interrupted inflow of gold to the country under the baggage rules.
A passenger can bring 100 grams of gold to the country without paying duty and 234 grams by paying duty under the baggage rules of the National Board of Revenue.
The virus outbreak has also ceased the scope of illegal trafficking of the precious metal, sources said.
On top of these, the government scrapped the 15 per cent value added tax on gold import in the budget for the fiscal year 2020-2021 following the demands of gold licencees.
Jewellers had been demanding for scrapping the VAT at the import stage and were terming it a major barrier to making gold import viable.
Apart from the import of the precious metal by the two traders, six other traders have applied to the central bank to import another 52.5 kilograms of gold.
Jewellery House applied to import 25 kg of gold, Jarwa House (Pvt) Limited around 14 kg, Riya Jewellers 12 kg, Rotno Gold Corner 3 kg, BDEX Gold and Diamond Limited 1 kg each along with Diamond World which applied to import another 20 kg.
The Bangladesh Bank on December 1 handed over the first-ever dealership licence for gold bar import to facilitate the import of the metal, ensure transparency in trade and prevent smuggling.
Initially, traders were reluctant to import gold from international markets through the legal channel due to the high tax rate.
As per an estimate given by the jewellers, the country’s demand for the precious metal is around 42 tonnes or 42,000 kg a year.
So far, the central bank has allowed 19 entities to import gold from aboard in compliance with the BB’s regulations.
