Tehran, Iran, Sept.5
Trend:
Iran plans to implement value added tax on gold trading fees rather than to increase its price, that has been on the rise in recent months and led to reduced sales, said the head of Gold and Jewelers Union.
Mohammad Keshti Ara talked about a draft bill on value added tax on gold, which is currently under review by the parliament's special committees, in an interview with Trend.
"Considering the problem with the VAT on gold over the recent period, it was proposed to obtain the value added tax via gold fee to affect the the gold price," he noted.
"In case the suggestion is approved, 9-percent VAT will be implemented on gold fee or profit; therefore, the price of gold will decline and people's purchasing power will increase," he said.
"The costs have increased due to the calculated value added tax on gold, and this undermined the domestic gold consumption in the market," he added.
The official emphasized that since the implementation of VAT on gold, its purchases in the country have fallen.
"The volume of gold production was around 120 tons in 2010; however, due to drop of demands in the market, the gold production decreased to 50 tons. Meanwhile, the import of gold and precious jewelries were banned, and we literally have no gold imports," he noted.
"The recent increase of USD rate has also effected the gold market. The price of one ounce of gold reached $1,527, the gold coin was traded for 41,2 million rial (app.$980), half gold coin sold for 21 million rial (about $500), and one quarter gold coin traded with 11,8 million rial (about $280)," he added.
One mithqal of gold (4.25 grams) is traded for 17,9 million rial ($426) and 18 karat gold - for 4,130 million rial ($98).