Following a plummet in gold jewelry sales in the UAE by almost 50 percent, jewelry vendors are hoping for a tax relief on the precious metal, Al Arabiya reports.
The previously tax-free country introduced a five percent value added tax in January, and markets like the gold jewelry market took a hit with sales decreasing by 30-50 percent in the first quarter of 2018.
According to the Khaleej Times, trade sources said that they sent a plea for a review of VAT, and are hoping for a positive official response.
“A special tax consideration will be a big boon for the wholesale and retail jewelry trade, which has been hit hard as the price competitiveness that has been the most appealing hallmark of Dubai, the City of Gold, has ebbed away with VAT introduction,” a jewelry retailer told the newspaper.
Vendors are hoping for the removal of the tax on business to business transactions, and a ‘designated free zone’ for VAT.
Jewelry demand in the UAE fell to a 20-year low according to the World Gold Council, while sales jumped significantly in December as consumers rushed to purchase the precious metal before tax was implemented on it.
The UAE has long been positioned as a major trading hub for gold and precious metals.