Gold price in Pakistan: How high can rates go after imposition of 17% GST?
January 21, 2022
- Gold jewellery's price may shoot up to Rs150,000 per tola, fear traders.
- “It is a disastrous decision for the jewellery business,” PGJTEA chairman says.
- Value of gold remains untaxed when it comes to jewellery worldwide, he says.
KARACHI: The imposition of a 17% sales tax on gold jewellery in the mini-budget would push the price of the yellow metal past Rs150,000 per tola, Pakistan Gems Jewellery Traders and Exporters Association (PGJTEA) said Thursday.
The association proposed the government impose tax on jewellery making rather than the complete final product, according to The News.
“It is a disastrous decision for the jewellery business,” PGJTEA chairman Akhtar Tesori said, as he rejected the new tax on gold and silver jewellery.
Tesori said it would hurt gems, fearing that jewellery businesses would be ruined and the poor and middle-income group persons, who buy small ornaments for their daughters' weddings, would no longer be able to buy it for their once-in-a-lifetime events.
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He added that the demand for the precious metal would reduce, which would turn into lesser demand of labour and eventually loss of jobs of the people associated with the industry.
Kashif Siddiqui, a jeweller in Karachi, said the government should pave the way to increase the number of taxpayers in the gold industry rather than twisting the arms of those who pay.
According to the Federal Board of Revenue (FBR), the gold economy size in the country is Rs2.2 trillion and around 160 tonnes of gold are consumed annually.
However, according to the board, only Rs29 billion gold market is declared and only 54 goldsmiths pay income tax out of 36,000 registered.
Earlier, the Senate Standing Committee on Finance and Revenue had also rejected the proposed 17% sales tax on articles of jewellery or parts of the precious metal from the existing 1.5% value of gold and 2% value of diamond plus 3% of making charges in a meeting held on January 7.
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Tesori urged Prime Minister Imran Khan and Finance Minister Shaukat Tareen to impose a tax on the making of gold and silver jewellery instead of imposing a tax on a final product.
It would hurt the business of those jewellers who were already paying taxes, he added.
He shared that the value of gold remains untaxed when it comes to jewellery worldwide and the cost jewellers charge for the making of ornaments and jewellery gets taxed.
