The National Board of Revenue (NBR) is working to bring about discipline in the country's gold and jewellery sector, long plagued by smuggling, weak compliance and regulatory loopholes, NBR Chairman Abdur Rahman Khan has said.

Most of the gold enters Bangladesh through illegal channels, he said, alleging that even some NBR officials have been involved in facilitating such unauthorised imports.Trade Fair Guide

"Formal imports are not happening as expected. Although official data show no significant gold imports, the market is still full of gold," the NBR chairman said.

Mr. Khan made the observations on Wednesday at the NBR's regular "Meet the Business" programme, where senior revenue officials held discussions with leaders of the Bangladesh Jewellers Association (Bajus).

Jewellery traders, however, urged the government to issue more gold import licences, warning that restrictions would only encourage illegal imports.

Although 18 licences were issued earlier, at least 10 were given to non-genuine traders while many established jewellers were excluded.

"Licences were given to people who were not involved in the jewellery trade, even to cricketers, while real businessmen were deprived," a trader said.

He further said smugglers often seek licences merely to avoid legal scrutiny rather than to conduct legitimate business.

Banks remain reluctant to provide loans to jewellery businesses, discouraging formal operations and compliance, traders complained.

Responding to the traders' concerns, the NBR chairman said those who genuinely want to import gold should be given the opportunity.

He also advised traders to formally place their demands before Bangladesh Bank and the Ministry of Commerce.

Mr. Khan said the NBR plans to gradually phase out the turnover tax, instead tax will be imposed based on actual profits.

"In the coming days, turnover tax will not be necessary if real transactions are properly recorded," he said.

The NBR plans to develop dedicated digital applications to help businesses submit accurate transaction data and pay taxes more easily, he added.

The Bajus leaders called for simplification of the gold import policy to make the market more competitive, arguing that facilitating legal imports would help curb smuggling and improve transparency.

If legitimate imports are encouraged, illegal trade will automatically decline, they mentioned.

They said higher VAT has widened the price gap between Bangladesh and international hubs such as Dubai and Singapore by Tk 25,000--30,000 per bhori, discouraging local purchases and pushing capable buyers to shop abroad.Trade Fair Guide

The 7.5 per cent post-import trade VAT significantly raises prices at the initial stage, they added.

Bajus President Enamul Haq Khan said Bangladesh has a unique tradition of using handcrafted and lightweight jewellery that cannot be replicated elsewhere, yet exports remain limited due to policy constraints.

He said in the absence of timely policy support, the industry -- once employing hundreds of thousands of artisans in areas such as Tanti Bazar and Shankhari Bazar -- has shrunk to just 5,000-10,000 workers and risks fading away like muslin.

Bajus Vice President and Standing Committee Chairman on Government Affairs and Policy Coordination Md Iqbal Hossain Chowdhury said the gold policy, introduced in 2018 and amended in 2021, needs further revision to allow businesses to operate legally and transparently.

He said most of the 18 dealership licences issued during the previous government have now become inactive, with gold imports remaining negligible.

At the meeting, Bajus proposed reduction of VAT on jewellery sales from to 2.0 per cent from the existing 5.0 per cent in line with regional realities, completing gold import approval and clearance within a fixed timeframe of 7-10 working days, expanding the importers base by cancelling inactive licences, offering duty drawback as an export incentive, and fully withdrawing advance income tax on the industry.

In response to that, the NBR chairman said efforts would be made to address the sector's problems in the upcoming budget.

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