Govt fixes flat VAT on gold, diamond, silver

The government has imposed a fixed VAT structure for the jewellery sector, taxing gold and platinum at Tk 2,500 per bhori, silver at Tk 100 per bhori, and diamonds at Tk 2,500 per gramme.

The new rates were imposed under the revised Finance Bill passed in parliament on Monday by voice vote, replacing the earlier 5 percent VAT that applied uniformly to gold, diamonds and silver.

The revision follows pushback from the Bangladesh Jewellers Association (Bajus).

Finance Minister Amir Khosru Mahmud Chowdhury had originally proposed a flat Tk 2,500 per bhori on both gold and silver.

However, Bajus objected, arguing this taxed silver, a far cheaper metal, at the same rate as gold, and instead proposed Tk 2,000 per bhori on gold and Tk 2,000 per carat (0.2 gramme) on diamonds.

The association said a fixed-rate system also reduces the scope for VAT evasion compared with a percentage-based tax, which is harder to enforce given how informally much of the jewellery trade operates.

According to an official of the National Board of Revenue (NBR), bringing diamonds into the fixed-VAT system alongside gold and silver is expected to significantly boost revenue collection from the jewellery sector.

“The inclusion of diamonds in the fixed VAT regime, alongside gold and silver, is expected to boost VAT collection from the jewellery sector several times over,” the official said on condition of anonymity.

The government separately reduced the capital gains tax on profits from selling gold, jewellery and digital currencies from a proposed 15 percent to 5 percent in the final bill.

The revision comes as gold prices have surged over the past year. A bhori of gold rose from Tk 1.72 lakh on June 5, 2025 to Tk 2.24 lakh by June 13, 2026, briefly touching a record Tk 2.86 lakh per bhori on January 29.

Much of Bangladesh’s jewellery trade remains outside formal tax channels, and weak enforcement has historically limited the government’s revenue collection from the sector.