The government has proposed a plan to temporarily curb the import of gold in the country to better manage the plummeting reserves of foreign exchange.
The proposal was shared by the Ministry of Commerce on Wednesday during a meeting of the sub-committee of the Senate Standing Committee on Commerce.
The meeting was held in the Parliament House on Wednesday with Senator Fida Muhammad in the chair. It was attended by Senator Muhammad Abdul Qadir and senior officers from the Ministry of Commerce (MoC).
During the meeting, a briefing on gold imports in the country was given and various issues impacting the jewelry and gemstones industry, including the import policy were discussed.
The sub-committee was informed that at the moment, gold is imported into the country under the Entrustment and Self Consignment Schemes.
The scheme allows a jeweler - who is exporting jeweler made from locally procured precious metals and gemstones - to avail 50% of all proceeds from his exports in the form of gold for import.
The commerce ministry said that the gems and jewelry sector of the country had been asking the government to review stringent policies regarding the import of precious metals and gems into the country. Similar requests were made from the Prime Minister’s Task Force for Gems and Jewellery and the Tax Ombudsman after deliberations with stakeholders.
Subsequently, a Gems and Jewelry Committee was created by the commerce ministry to address concerns. The committee consisted of officials from the ministry, the State Bank of Pakistan (SBP), the Federal Board of Revenue (FBR) and the Trade Development Authority of Pakistan (TDAP)
The committee has finalized a set of proposals.
On other incentives for the gems and jewelry sector, the sub-committee was informed that at the moment no duty was being charged from traders. Moreover, the 17% sales tax has also been lowered to encourage jewelers to enter the tax net.
Despite these measures and the current precarious economic condition of the country, the commerce ministry recommended that imports of gold must be curtailed until the dollar rate and reserves stabilize.
The matter can be reviewed at a future date when the country’s economic status has improved.
The sub-committee decided to summon officials of the FBR to the next meeting seeking details on taxation rules applicable to the gems and jewelers industry.
Members of the Sarafa committee will also be invited for a holistic view of the situation.