By: Amr Adel
Dubai – Mubasher: Dubai Multi Commodities Centre’s (DMCC) chairman Ahmed bin Sulayem on Monday requested the UAE’s Federal Tax Authority (FTA) to reconsider the levy of the valued-added tax (VAT) on the gold and diamond trade.
The UAE is set to begin imposing a 5% VAT on various products starting January 2018.
Traders in the gold and diamond market have expressed concerns over the reoccurrence of some historical experiences related to levying the VAT, bin Sulayem said on the sidelines of the Dubai Diamond Conference 2017, noting that the FTA should handle the matter carefully.
Although the VAT rate in the UAE is one of the lowest in the world, it is of big concern for the DMCC, its member companies, and the gold and diamond industry in general, he added.
Companies working in Dubai’s gold market stated that the volume of gold trade fell by around 30% to 40% year-on-year in 2017 due to custom duties and the decline witnessed in the wholesale gold jewellery segment, the chairman commented.
Over the past 15 years, Dubai has grown into the third biggest hub for trading diamonds, the DMCC’s top official revealed, noting that this was due the safe business environment provided by the government.
The annual value of the diamond and gold trade has reached a combined $75 billion, the top official concluded.
Also, speaking in the Dubai Diamond Conference, Ministry of Finance (MoF) undersecretary Younis Haji Al-Khoori stated that the total value of diamonds traded in Dubai surged to over $26 billion in 2016 from $3.5 billion in 2003.
This increase itself is an indicator of the volume of the diamond trade and the significant international cooperation in this area, Al-Khoori added.
Earlier in October, the FTA stated that a 5% VAT will be imposed on the gold and diamond trade as of January 2018.
Translated by: Muhammad Abdulwakeel
