Glitter returns to gem trade as VAT goes out
 

BY ROHAN Mathes

THE Cabinet has decided to remove the 15 per cent Value Added Tax (VAT) on the imports and trading of rough, cut and polished gemstones, diamonds and precious metals with immediate effect, Advanced Technology and National Enterprise Development Minister Rohitha Bogollagama announced yesterday.

"The government is withdrawing in toto the VAT on the import of gems, diamonds and precious metals. We have taken a bold step forward in the right direction to make Sri Lanka the hub in the Gem Industry," Bogollagama told a news conference in Colombo.

He pointed out that the gem and jewellery industry is now an open, progressive and value added sector. Gem exports which are around Rs.120 million in value now, are expected to surpass tea and apparel sector exports in the future, with more value addition and creativity.

The 2006 budget will provide incentives to enhance the industry and harness the true potential of the gem trade. The removal of the 15 per cent VAT would fetch more foreign exchange to the country, generate more employment and also relatively strengthen the banking process, he added.

Justice and Law Reforms Minister and Ratnapura District Parliamentarian John Seneviratne explained to the media the negative effect of the gem trade in Madagascar on Sri Lanka and how it could be reversed for the well-being of the local industry.

Fielding questions from the media on the issue of illicit gemming, Minister Seneviratne said they would expand the industry and provide more opportunities for legal gemming, which in turn would eliminate illicit gemming.