NEWS MEDIA reported that the government is going to introduce a gold policy to make import and export of the precious metal easy, and ensure transparency and accountability in its trade inside the country. The Commerce Ministry has already sent the draft policy to the Cabinet Division for approval. The existing rules allow import of gold, subject to permission from Bangladesh Bank, but in reality, gold has never been imported through legal channels since the country’s independence. We laud the government for legalizing bullion import by formulating gold policy as the import of the yellow metal through legal way will contribute the revenue and empower the government to crack smugglers who use Bangladesh as the smuggling route.
The country’s annual demand for gold is 20-40 tonnes, in which, almost 80 percent of the demand are met with smuggled gold and the rest from recycled gold, depriving the government of a huge amount of tax. It also creates scopes for money laundering and accumulation of black money. Many countries, including India, earn billions of dollars by exporting gold ornaments, but Bangladesh’s export earning in this sector is abysmally low. In 2016, the total export of gold ornaments was $638 billion across the globe. Of the amount, India’s export amounted to around $42 billion. During the period, Bangladesh exported gold ornaments worth only $672.
To ease gold import, 11 measures have been laid out in the Draft Policy. The central bank will appoint dealers for importing gold bars to meet the country’s requirement. The dealer may be an authorized bank or an individual-owned firm, a joint venture or a limited company. Local manufacturers of gold ornaments will not be able to buy gold from others except for these dealers. The dealers will be allowed to import gold through bonds, but for that they will have to get bond licences in line with the existing law. As per The Draft Policy, gold ornament manufacturers will also be given cash subsidy for exporting gold items. If gold bars are imported only for manufacture and export of gold ornaments, duty draw back benefit will be given to the exporters.
The policy come at the moment when gold smuggling increased remarkably turning Bangladesh into a transit point for international smuggling rackets. Here, an effective implementation of the bullion policy can eventually enrich the economy and legalize import of gold. It’s a belated but a welcoming step.
