“The government has imposed a 5 percent customs duty and another 5 percent surcharge on gold imports,” a top government official who is involved with the decision making told Reuters on condition of anonymity.
“There is an increase in gold imports and we have seen some people using the situation as an arbitrage with India having a tax. We also have found some leakages and we want to prevent this.”
Recently, Sri Lankan customs nabbed a series of people suspected of smuggling gold out of the country at airports.
The National Gem and Jewellery authority said the increase in the import tax on Gold by 10% would have an immediate impact on local gold prices.
A spokesman said prior to the tax increase one sovereign of 24-carats was sold at Rs.47,000 but that it would now cost between Rs.4,000 and Rs.5,000 more.
He said the fallout from the tax increase was not noticed yesterday but the prices were bound to increase by next week.
When asked what prompted the 10 per cent tax on Gold, the spokesman said the Authority was not aware why such a decision was taken by the Treasury.
“These matters are handled by the Treasury and we have not yet received any official notification about the reasons for the increase” he said. (Reuters)