Vietnam Raises Export Taxes on Gold to 10% to Deter Unlawful Exports

Vietnam's government has introduced a new tax regime on gold exports, hiking the duty from zero to 10% in a bid to curb the practice of gold trading enterprises exporting gold jewelry to skirt regulations. The move is aimed at reducing the phenomenon of gold trading enterprises evading export licenses by shipping gold jewelry overseas. However, the higher tax rate may make it more challenging for local gold traders to compete with foreign suppliers, leading to potential job losses and economic disruption.

Key Takeaways:

• The Ministry of Finance in Vietnam has increased export taxes on gold, including jewelry, from zero to 10% effective January 1, 2023.
• The new tax rate is designed to deter the practice of gold trading enterprises exporting gold jewelry without proper export licenses.
• The 10% tax rate is seen as high and may make locally-manufactured gold jewelry more expensive on overseas markets compared to foreign suppliers.
• The decision may discourage gold jewelry exports, with some companies considering restructuring their business plans to shift to exporting silver jewelry.
• The Ministry of Finance initially considered a 20% tax on gold exports but reduced it to 10% in the issued regulation.
• The State Bank of Vietnam has allowed gold imports for the third time this year to cool down the domestic gold market.

Statistics:

• The new export tax rate is 10% effective January 1, 2023.
• Gold prices in Vietnam have settled back to about 36 million VND (US$1,675) per tael after gold imports were allowed.
• The initial proposed tax rate was 20%, but it was reduced to 10% in the issued regulation.
• A tael is equivalent to 1.2 ounces of gold.
• Gold prices in Vietnam hit an all-time high of over 38.2 million VND ($1,910) per tael on November 9.

Sources:

• Asia Pulse - "Vietnam to impose 10% export tax on gold from January 1"
• VNA - "State Bank of Vietnam allows gold imports to cool down the market"