The Vietnamese Ministry of Finance has just proposed to increase export tax on gold products of less than 95 per cent purity to two per cent from zero per cent.

The proposal is in the draft decree to amend and supplement Decree 122/2016/ND-CP on export tariffs, preferential import tariffs, list of goods and flat-rate duties, mixed tariffs, and out-of quota import tariffs.

With the existing regulations on trading, importing and exporting gold, there are two export tax rates of zero per cent and two per cent for gold, gold jewellery and fine works of at least 8-karat purity.

Companies are not allowed to export raw gold, only fine works and gold jewellery under the Business Registration Licence.

However, recently, there has been a phenomenon of gold exporting enterprises declaring gold fine works of less than 95 per cent purity and declaring the customs code with a tax rate of zero per cent.

As the tax base for exported gold is still according to the enterprise’s declaration, the customs authority does not have enough basis for inspection and verification. Meanwhile, companies conducting gold quality inspection before exporting all declare that the gold is below 95 per cent purity, the re-examination documents of foreign partners also show the same results, causing the risk of lost tax revenues.

The ministry said the world and domestic gold markets have fluctuated strongly in recent years, mainly due to the uncertainties of the world economy, trade disputes, as well as a sharp drop in the US dollar compared to other major currencies, and especially the complexity of the pandemic, affecting investors’ sentiment all over the world.

Gold exports surged recently. Data compiled by the General Department of Customs showed that in the first half of this year, the export turnover of gold reached $380 million.

In 2020, the amount was $2.6 billion, up more than $600 million compared to 2019 and $2 billion over the same period of 2018. Of which goods made of gold with gold content of less than 95 per cent under the code 7114.19.00.90 account for a large part, about $2.1 billion.

Last year, there were 469 enterprises exporting and importing gold products including pearls, precious stones, semi-precious stones and their products, jewellery made of other materials, and metal coins.