Withdrawal of 2% luxury tax on gold, silver demanded

By A Staff Reporter,Kathmandu, June 10: Gold and silver entrepreneurs have demanded immediate withdrawal of the 2 per cent luxury tax levied on gold and silver items.

Organising a press conference jointly here on Friday, the Federation of Nepal Gold and Silver Dealers’ Association (FENEGOSIDA), the Federation of Nepal Gold Silver Gem and Jewellery Associations and the Federation of Handicraft Association Nepal demanded that the new tax provision to impose 2 per cent luxury tax on gold and silver items should be removed citing that the provision was against the interest of gold and silver dealers and their business.

Through the Economic Bill 2023/24, the government has arranged to impose a 2 per cent luxury tax on three types of goods consumed in Nepal. The new luxury tax is imposed on the purchase of diamonds, pearls, stone-studded gold or precious metal jewellery worth more than Rs. 1 million.

Businessmen have also objected to the discriminatory policy allowing men returning from abroad to bring 25 grams and women 50 grams of gold jewellery consisting of chemicals.

President of the Federation of Nepal Gold and Silver Dealers’ Association Manik Ratna Shakya said that the unnatural increase in customs rate would leave a negative impact on the gold and silver business.

“Due to the unnatural increase in customs duties, gold and silver jewellery will be more expensive in Nepal than in other countries, creating a situation where Nepalis living abroad will tend to buy foreign jewellery instead of Nepali ones, resulting in the loss of domestic jobs and further widening of the trade deficit,” he said.

The budget has increased the customs duty on the import of gold and silver by 50 per cent.

He asked the government to review the customs rate on gold and silver and opened up the import of gold.

Similarly, it has been announced that an additional 2 per cent luxury tax will be imposed on this business, which is in direct contrast to the budget’s policy of promoting traditional and cultural businesses, he added.

The Federations said that the tax arrangement was impractical and wrong as jewellery are used as movable property in traditional, religious, cultural and household activities.

Due to the government policy, the price of gold in Nepal will be higher by Rs. 15,000 per tola than in other countries, the gold traders argued. 

Due to this, Nepalis living abroad will stop taking gold jewellery made in Nepal said Shakya.