Jewellery imports into Dubai will attract a duty of 5% from January 2017 following a recent decision of the Dubai government according to media reports. The duty will be imposed on all jewellery that is imported for sale within the country, though jewellery for re-export will not attract the levy, the reports said.
As per the reports, the duty tariff of 5 per cent on jewellery imported by wholesalers has been applicable across the UAE for some time now. However, earlier, the governments of Dubai and Sharjah have been offering a rebate on the levy to promote the country as a hub for jewellery trading.
The move may provide a fillip to local manufacturing of jewellery over time, though some reports suggest that the import duty could subsequently be followed with the levying of a VAT on local sale of jewellery as well.
The reports quote Tawhid Abdullah, Chairman Dubai Gold & Jewellery Group, as having said that the jewellers will adapt their businesses as per the policies introduced by the government, and will work hard to uphold Dubai’s status as the ‘City of Gold’.
He added that the DGJG welcomes “all positive initiatives by the Dubai Government to streamline its economic policies with the federal as well as the GCC authorities” and expressed the hope that Dubai will continue to be at the forefront of the jewellery business providing not only the “world’s best designs”, but also the “most affordable prices both at the wholesale and retail level”.
The UAE is also a major destination for exports from India, accounting for over 30% of the country’s total gem & jewellery exports worldwide. While some manufacturers have expressed concerns about the impact of the levy on exports from India, others say that the move could boost sales of bridal jewellery within India. Reports suggest that currently many Indians and NRIs prefer to make bridal purchases in the Middle East, as prices of gold jewellery within India are high as a result of the 10% import duty and the introduction of excise duty of jewellery last year.