BEIJING, Nov 1 — China has abolished a long-standing tax incentive on gold sales in a move that could raise costs for consumers in one of the world’s largest bullion markets.
Effective today, the Ministry of Finance announced that retailers will no longer be allowed to offset a value-added tax (VAT) when selling gold purchased from the Shanghai Gold Exchange, Bloomberg reported.
The new rule applies whether the gold is sold directly or processed into other forms, covering investment products like high-purity bars and coins as well as jewellery and industrial materials.
While the change is expected to boost government revenue at a time when weak economic growth has strained public finances, analysts warn it will likely increase the cost of buying gold for Chinese consumers.
The policy shift comes amid a period of high global demand for the precious metal.
Despite the correction, gold remains near the US$4,000-an-ounce level and some industry players still expect prices to reach around US$5,000 within a year.
