Pakistan’s jewellery sector has sought resumption of tax incentives, WealthPK reported on Sunday. Pakistan’s gems and jewellery sector had demanded the government to reverse recently adopted amendments to Sales Tax Act and immediately resolve its issues for smooth running of the business in the country.
Pakistan Jewellers Association, in a letter, a copy of which is available with WealthPK, has appealed to the National Assembly Standing Committee on Finance for support in reversal of amendments to Sales Tax Act which were recently adopted by the Parliament through Supplementary Finance Act, 2022.
It said that the sale of jewellery was liable to sales tax at the rate of 1.5% on gold, 3% on making and 2% on value of diamonds, but the Finance Supplementary Bill proposed to increase it to normal rates which is 17%.
“We have been engaged with the ministries of finance and commerce for the last few years for the development and documentation of the jewellery sector in Pakistan.
The core objective of the group is to make the jewellery sector of Pakistan more vibrant, documented and compliant, so as to enable it to contribute towards the growth of the country by higher revenue contribution and export augmentation,” it said.
Out of approximately 36,000 jewellers, only 50 plus are registered with sales tax, and such a harsh measure would result in complete closure of this documented sector and fall in revenue.
It further highlighted that in history, even when reduced rate was not there, exemption was available up to 90% of the value.
Similarly, jewellery across the globe is taxed at reduced rates i.e., the rate of value added tax (VAT) on jewellery is 3% in India. Jewellers are of the view that if gold is taxed at normal rates, it will lead the industry towards non-documentation and smuggling of gold which is not going to help the vision of a documented sector in trade.—INP
