Jewellers worry over tax hike on cut stones

Gem entrepreneurs will be required to pay a 10 per cent commercial tax on sales of finished stones, plus 15 per cent for uncut stones, even as other commercial taxes have been reduced under the 2015 Taxation Law, according to the Internal Revenue Department under the Ministry of Finance.

Min Htut, director-general of the Internal Revenue Department said: “Section 36 of the Gemstone Law says anyone who sells gems in the country, whether in kyat or in foreign currency, shall pay commercial taxes in accordance with existing laws, even though the 2015 Taxation Law has reduced tax rates.”

The department will collect a 25 per cent commercial tax on sales of gems as of this year, he added.

Under the Income Tax Law, gem entrepreneurs must pay the income taxes if they make a profit.

Cigarettes, tobacco, alcohol, wine, teak, hard woods, jade, ruby, sapphire, emerald, diamond and other cut and uncut stones and jewellery items are included on a list of special goods under the Income Tax Law, enacted on April 2.

The commercial tax rates levied on the special goods are: cigarettes (120 per cent); tobacco-related goods (60 per cent); alcohol and beers (60 per cent); wine (50 per cent); teak, hard woods and other woods (25 per cent); finished jade, ruby, sapphire, emerald, diamond and other gems (15 per cent); and uncut stones and jewellery (5 per cent).

Jewellers have begun to express concern over the rising taxes on finished stones and gems.

The Commercial Tax Law was promulgated in 1990, and the Gemstone Law in 1995. According to the nature of our laws, the latest versions of laws have more influence than old ones. Last year, under the Gemstone Law, the department revised the tax rates on the export of gems (30 per cent for uncut stones and 10 per cent for cut stones) and on the sale of gems within the country (30 per cent for uncut stones and 15 per cent for cut stones). Gem companies did not pay income taxes until last year, he added.

Source: Eleven Media

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