Dubai – Mubasher: The UAE government’s decision to exempt gold and diamond trade from the value-added tax (VAT) will boost the national gold market and revitalise the entire industry in Dubai and the UAE in general, analysts told Mubasher on Wednesday.
Earlier in May, the UAE Cabinet adopted a law to apply the value-added tax (VAT) reversed charge mechanism for investors in gold, diamond, and precious metals, which regulates investments in precious metals used in trade with a purity of 99% or more.
The decision was expected and I think that it will restore Dubai’s high demand on gold and lure back investors who abandoned the Emirati market following the introduction of the VAT, which resulted in stagnation, commodities analyst at Sabayik Al Kuwait Company Rajab Hamed commented.
Demand for gold coins and bars will soar in the coming period, Hamed added.
The recently-applied precious metals’ tax exemptions may cover all levels of production, import, export, and trade, member of the National Advisory Board of Chartered Institute for Securities &Investments (CISI) Wadah Al-Taha said.
The UAE Federal Tax Authority (FTA) is expected to give further clarifications about the exemption decision, the analyst noted.
Gold prices declined over the week, as 24-K, 22-K, 21-K, and 18-K per-gram prices reached AED 154.48, AED 141.88, AED 135.43, and AED 116.08, respectively.