Sri Lanka Removes Import Taxes on Gold

All taxes on the import of gold into Sri Lanka has been removed by the government, with effect from the 1st of March 2010.

Hasitha Tillekeratne, the Chairman and CEO of the National Gem and Jewellery Authority, has commended his excellency, the President of Sri Lanka on the decision to exempt Nation Building Tax (NBT)on the importation of gold (amendment to the Nation Building Tax Act No. -9 of 2009).

The Vice Chairman, Mr A.P. Jeyarajah of the Sri Lanka Gem and Jewellery Association told the Daily News Business  that this move will make the export prices of  jewelry manufactured in Sri Lanka highly competitive in the international market.

Hasitha Tillekeratne, said “The country’s jewellery industry will receive a shot in the arm by this decision”. He also noted that the decision would substantially reduce the operating costs for Sri Lankan jewelers. “The major outcome of this decision will be to increase the global competitiveness of our jewellery industry with a resultant increase in foreign exchange earnings and the generation of new job opportunities”.

The taxes by the government on gold imports included the 1% BTT and 3% nation building tax. According to Jeyarajah, it had a major impact on the industry. This led to a drop in export earnings as well as local earnings. These taxes were introduced in Sri Lanka for the first time in 2009.

Summary of Jewelry Exports

Year

2005 – USD 17.3 Million

2006 –           23.6

2007-            25.9

2008-             26.00

2009-              16.80

The request for the exemption of the tax was made by the National Gem and Jewellery Authority, Sri Lanka Export Development Board and the Sri Lanka Gem and Jewellery Association to his excellency, the President, via the Ministry of Enterprise Development and Investment Promotion.

Over 25000 men and women are employed in the jewellery manufacturing industry of Sri Lanka.

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