[🇧🇩] Jewelry Industry in Bangladesh

[Saif]

Gold emerges as an attractive investment tool as prices jump

Throughout 2024, gold seemingly became synonymous with price hikes amid economic turbulence, a weakening taka and plummeting interest rates on savings tools, making the precious metal a safe bet for middle and upper-middle-income people, according to jewellers.

www.thedailystar.net

Gold emerges as an attractive investment tool as prices jump

Investing in gold has become more profitable than savings certificates and various bank deposits as the price of the precious metal gained 24.53 percent year-on-year to Tk 138,288 per bhori in 2024. Photo: Anisur Rahman

Throughout 2024, gold seemingly became synonymous with price hikes amid economic turbulence, a weakening taka and plummeting interest rates on savings tools, making the precious metal a safe bet for middle and upper-middle-income people, according to jewellers.

They said many higher middle-class and middle-income earners in 2024 rushed to buy gold coins and small bars, while retail sales of gold ornaments dipped as much as 50 percent year-on-year.

Last year, gold prices were adjusted 62 times, with upward adjustments surpassing downward adjustments by 35 times, according to Bangladesh Jeweller's Association (Bajus) data.

The yellow metal gained 24.53 percent year-on-year to Tk 138,288 per bhori (one bhori is equal to 11.664 grams) in 2024, according to the association.

"Investing in gold has become more profitable than savings certificates and various bank deposits," said Masudur Rahman, vice-president of Bajus.

He said many people are now investing in gold for a good short-term return. "Specially the middle-class and upper middle-class people are now investing more in gold."

"Although the local gold market had been quite volatile over the last two to three years, it caused no concern for gold investors," Rahman told The Daily Star.

At times of economic uncertainty, brutal price pressures, economic slowdown or repression, people historically tend to hold on to gold as the metal offers gains somewhat immune to these bumps.

Besides, gold offers a high level of liquidity, which means people can easily turn their holdings into cash.

Since March 2023, the country has been facing stubbornly high inflation, hovering above 9 percent.

For savings, the price pressures mean that if the returns are below or equal to inflation rates, savers will be adversely affected.

With inflation hitting 11.38 percent in November 2024, currently available national savings certificates offer almost similar gains ranging from 11.76 percent to 11.52 percent.

In contrast, according to jeweller platform leader Rahman, if someone buys a gold ornament, coin or bar worth Tk 2 lakh and sells it within two or three weeks, they will pocket a handsome profit of around Tk 10,000 per bhori.

"And if they sell it after a year, the profit will be even higher because the market is consistently showing an uptrend," he added.

In June 2022, the price of per bhori gold in the local market was Tk 77,216, which has increased to Tk 138,288 now, down from the highest price of Tk 143,000 recorded in October last year, Bajus data show.

RETAIL SALES DOWN BY 50%

Amid the price volatility, local jewellers said their sales last year declined by about 40 to 50 percent compared to the previous year.

They said current domestic price fluctuations are due mostly to surges in gold prices in the international market and the local currency Taka losing ground against the US dollar.

Reponul Hasan, owner of the Jewellery House in old Dhaka, said that if the prices of any product fluctuate frequently, it will certainly confuse buyers and affect sales.

Due to the price fluctuations of gold, eventually reaching record highs, he said that his year-on-year sales have declined by 30-35 percent.

Jewellers' leader Rahman, also chairman of the Bajus standing committee on pricing and price monitoring, said that local prices are set in coordination with the international market and retail sales dropped 40 to 50 percent last year due to the price fluctuations.

If the demand of a product is high and it is not available in the market as per demand, the prices will naturally go up, he added.

In the global market, gold prices marked 2024 as a record-breaking year as robust central bank buying, geopolitical uncertainties and monetary policy easing fueled the safe-haven metal's strongest annual performance since 2010, according to reports.

According to government estimation, the country needs 20 to 40 tonnes of gold per year.

The commerce ministry says almost 80 percent of the demand is met through smuggling and the rest by recycled gold.

Industry insiders said that the high taxes on imported gold were the main reason companies felt more comfortable sourcing gold from unauthorised channels.

Bajus said that gold worth roughly Tk 73,000 crore is smuggled in every year.​

 

[Saif]

NBR plans to install nearly 20,000 EFDs in jewellery shops

The National Board of Revenue (NBR) plans to install nearly 20,000 electronic fiscal devices (EFDs) in jewellery shops across the country to boost revenue collection from the sector.

www.thedailystar.net

NBR plans to install nearly 20,000 EFDs in jewellery shops

In the first phase, electronic fiscal devices will be installed across jewellery shops in the Dhaka and Chattogram divisions. Photo: Star

The National Board of Revenue (NBR) plans to install nearly 20,000 electronic fiscal devices (EFDs) in jewellery shops across the country to boost revenue collection from the sector.

As part of this nationwide initiative, the tax administration has initially selected 17 districts, including Narayanganj, Narsingdi, Munshiganj, Manikganj, Savar, Gazipur, Mymensingh, Netrokona, Kishoreganj, Sherpur, Tangail, Jamalpur, Chattogram, Cox's Bazar, Bandarban, Khagrachhari, and Rangamati.

According to NBR sources, the administration issued a letter to the leaders of the Bangladesh Jewellers Association (Bajus) and held a meeting with them to facilitate the process.

The NBR is scheduled to hold a virtual meeting with stakeholders on Thursday to raise awareness about the initiative.

Genex Infosys PLC Ltd has been assigned to install the EFDs, as stated in an official letter issued by the NBR.

This initiative comes at a time when the revenue board is struggling to meet its collection targets and has recorded a year-on-year decline in revenue.

During the first five months of the current fiscal year, the tax administration collected Tk 130,185 crore, marking a 2.62 percent decrease compared to the same period last year.

Additionally, on January 9, the NBR raised value-added tax (VAT) and supplementary duty (SD) on nearly 100 goods and services, despite concerns that the move could exacerbate inflation and slow economic activity.

The VAT and SD hike aligns with recommendations from the International Monetary Fund (IMF), which approved a $4.7 billion loan for Bangladesh in January last year.

The IMF advised that the government rationalise tax exemptions, improve compliance with tax laws, and implement reforms to strengthen domestic revenue collection in the country, which has one of the lowest tax-to-GDP ratios in the world.

The NBR's letter also requested a list of jewellery establishments located in various markets and areas under the jurisdiction of the Dhaka Commissionerate.

"If it is not possible to provide the complete list at once, it is requested to submit it in phases," the letter added.

Masudur Rahman, spokesperson for Bajus, told The Daily Star that in the first phase, EFDs will be installed across all jewellery shops in the Dhaka and Chattogram divisions.

The installation will continue in phases across the remaining divisions, he added.

Currently, the number of registered VAT payers in Bangladesh is just over 500,000, as a significant number of eligible businesses remain outside the system.

According to Bajus, many jewellery shops in the country do not have VAT registration. The government's revenue will increase if EFDs are set up across all establishments, as such shops would be required to register.

According to government estimates, the demand for gold in the country stands at roughly 20 to 40 tonnes per year.

The commerce ministry says almost 80 percent of the demand is met through smuggling. Bajus added that gold worth around Tk 73,000 crore is smuggled into the country each year.​

 

[Saif]

80% of jewellers remain outside VAT net

Around 32,000 jewellery shops in the country are operating without value-added tax (VAT) registration, apparently evading the indirect tax paid by their consumers, according to the National Board of Revenue (NBR).

www.thedailystar.net

80% of jewellers remain outside VAT net

Around 32,000 jewellery shops in the country are operating without value-added tax (VAT) registration, apparently evading the indirect tax paid by their consumers, according to the National Board of Revenue (NBR).

The revenue administration said that only 8,000 gold ornament shops out of a total of 40,000 stores are under the VAT net, and it collected roughly Tk 100 crore in the last fiscal year.

The issue has come into the spotlight as the revenue board moves to install Electronic Fiscal Devices (EFDs), or sales data controllers, to monitor sales at retail and wholesale stores across the country.

According to the NBR, installing the devices would help curb VAT evasion and increase domestic revenue collection, which is one of the lowest in the world in terms of gross domestic product (GDP).

Over the past 15 years, the government has been trying to bring retailers under the VAT net to boost overall tax collection by introducing electronic sales registers. Yet, compliance remains largely absent.

As part of its efforts to improve compliance, the NBR recently met with the Bangladesh Jewellers' Association (Bajus) to bring its 23,000 members under the EFD system. So far, it has managed to install only 1,000 EFDs in jewellery shops.

As such, the revenue board has requested Bajus to write to all jewellery associations and sellers, urging them to obtain VAT registration and install EFDs.

Badal Chandra Roy, general secretary of Bajus, told The Daily Star that they want to bring all such businesses under the tax net to create a level playing field so that everyone complies.

"Since 2021, we have made repeated efforts to bring other jewellery businesses under VAT and tax regulations, urging the revenue board to ensure compliance," Roy said.

He also said that VAT-compliant businesses are struggling to survive because of non-compliant ones, which can offer gold items at lower prices by bypassing VAT.

According to government estimates, the demand for gold in Bangladesh is roughly 20-40 tonnes per year.

The commerce ministry says that almost 80 percent of this demand is met through smuggling.

Meanwhile, Bajus estimates that gold worth around Tk 73,000 crore is smuggled into the country each year.

At present, jewellery stores need to pay 5 percent VAT on sales, and a huge chunk of VAT could be collected once all shops are brought under the tax net. This would subsequently increase the government's overall revenue collection from domestic sources.

Given this situation, EFDs will be installed in all jewellery shops in the Dhaka and Chattogram divisions in the first phase, said an NBR official.

Md Abdur Rouf, a member of the VAT policy division at the NBR, said, "This is a long-standing issue. It is not just jewellers—many other sectors also remain outside the VAT net."

"Now, we have taken the initiative to go sector by sector. We have started with jewellers. Bajus has said that it would cooperate with the NBR," he told The Daily Star.

Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue (CPD), told The Daily Star that bringing businesses without VAT registration under the tax system is a "straightforward task."

However, the NBR has yet to complete this, which reflects a weakness in the government's revenue collection efforts, he said.

Given the typical transaction volume in Bangladesh, collecting only Tk 100 crore in VAT annually from the jewellery sector seems unrealistic, he said, adding, "The actual figure should have been much higher."

It should also be investigated whether those responsible for collecting VAT from these stores are receiving any benefits from them, he commented.

Moazzem further said that structural issues are preventing proper collection from many establishments, even though there is huge potential for revenue collection in remote areas.

To address this, he said, NBR officials should increase their physical presence in the field.

Besides, prompt measures should be taken to collect revenue from these establishments through digital means, added the CPD research director.

Currently, the number of registered VAT payers in Bangladesh is just over 5 lakh, as a large number of eligible businesses remain outside the VAT net.​

 

[Saif]

Gold prices set to hit Tk 150,000 for the first time

From tomorrow, a bhori of 22-carat gold will cost Tk 149,812

www.thedailystar.net

Gold prices set to hit Tk 150,000 for the first time
From tomorrow, a bhori of 22-carat gold will cost Tk 149,812

Photo: Reuters/file

Gold prices are set to hit roughly Tk 150,000 per bhori for the first time, making the metal more expensive for buyers.

Today, the Bangladesh Jewellers' Association (Bajus) decided to hike the price of gold to Tk 12,844 per gramme from tomorrow, up by 1.34 percent from nearly a week ago's Tk 12,673, due to the increase in the price of pure gold in the domestic market.

Based on the new rate, a customer will have to pay Tk 149,812 per bhori or 11.664 grammes, with effect from tomorrow, said a press release from Bajus.

The previous price of each bhori of 22-carat gold was Tk 147,806.

The price of gold, for which Bangladesh is highly dependent on foreign sources, has been rising steadily for more than a year, influenced by hikes in the international market and volatility in domestic supply.

In July 2023, the price of gold crossed the Tk 100,000 mark for the first time in Bangladesh.

The country requires between 20 and 40 tonnes of the metal, and about 80 percent of the demand is met through smuggling.​

 

[Saif]

Gold prices hit an all-time high in Bangladesh

Gold prices in the country have increased once again, setting a new record. The price of each bhori of 22-carat (11.664 grams) gold has been increased by Tk 1,470, bringing the cost of the precious yellow metal to Tk 151,282. This marks the highest gold price ever recorded in Bangladesh. The new

thefinancialexpress.com.bd

Gold prices hit an all-time high in Bangladesh
FE Online Desk
Published :
Feb 17, 2025 20:42
Updated :
Feb 17, 2025 20:42

Gold prices in the country have increased once again, setting a new record.

The price of each bhori of 22-carat (11.664 grams) gold has been increased by Tk 1,470, bringing the cost of the precious yellow metal to Tk 151,282.

This marks the highest gold price ever recorded in Bangladesh.

The new rates will come into effect on Tuesday.

The Bangladesh Jewellers' Association (BAJUS) announced the price hike in a press release on Monday, attributing the increase to the rising cost of pure gold in the local market.​