SATV 12 June, Kathmandu: Gold and silver traders have launched a protest demanding the removal of the luxury tax on gold and the 13 per cent VAT on diamonds.
The umbrella organisations -- Federation of Nepal Gold and Silver Dealers' Association, Federation of Nepal Gold Silver Gem and Jewellery Associations and Federation of Handicrafts Association of Nepal have jointly staged a protest across the nation, said Diyesh Ratna Shakya, Senior Vice President of Federation of Nepal Gold and Silver Dealers' Association.
On Thursday, traders closed jewellery shops across the country, including Kathmandu. He said that entire gold and silver shops across the country will remain closed on Friday too.
They have demanded the removal of the 2 per cent luxury tax and 6 per cent customs duty on gold and 13 per cent VAT on diamonds.
Similarly, they have also demanded with the government to formulate a clear policy for the trade of gold and silver. The government has decided to impose a luxury tax of 2 per cent on the purchase of gold, effective from next fiscal year 2025/26.
"We have been forced to protest after the government imposed luxury tax on gold and VAT on diamonds. The 2 per cent luxury tax the government is set to impose on gold and gold jewelry through the budget is a multiple tax system (round tripping) applied to each individual sale.
Although it sounds like only 2 per cent at first glance, in practice it is a mandatory tax system that requires customers to pay an additional 6 per cent. So, this provision will increase the price of jewelry, which will affect both traders and consumers. The government has no choice but to remove this arrangement, Shakya told The Rising Nepal.
He blamed that the 13 per cent VAT on diamonds and precious stones have further burdened the common consumer with higher prices. At a time when gold prices are skyrocketing and recession is looming, the new tax provision appears to be pushing the gold market further towards a great depression, he said.
He said that such a price increase would further encourage the illegal import of gold jewellery through our country's open borders. The new tax regime on gold and diamonds is likely to affect the livelihoods of 25,000 businessmen, more than 300,000 artisans and labourers, and 1.5 million dependents, he said.
About 20,000 shops under Federation of Nepal Gold and Silver Dealers' Association, Federation of Nepal Gold Silver Gem and Jewellery Association and Federation of Handicrafts Association across the country. However, more than 23,000 jewelley shops are registered in PAN across the country.
Gold price up by Rs. 1,600 per tola
Gold price in the local market surged significantly on Thursday, recording a sharp increase of Rs. 1,600 per tola.
According to the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), the price of gold increased to Rs. 192,900 per tola (11.664 grams) on Thursday from Rs. 191,300 on Wednesday.
Gold price increased by Rs. 1,300 per tola in the domestic market on Wednesday. However, the price of silver has decreased by Rs. 15 per tola today. The price of silver is fixed at Rs. 2,150 per tola for Thursday which was traded at Rs. 2,165 per tola on Wednesday.
According to FENEGOSIDA, the upward trend is attributed to the rising prices in the international market, where gold rose by USD 31 per ounce to reach USD 3,372 on Thursday.
