Amid policy constraints and operational challenges in the gold market, the Vietnam Gold Business Association has submitted recommendations to the government, calling for the removal of key bottlenecks that are hindering business activities.

Legal gaps and compliance challenges

From an implementation perspective, the association noted that many current regulations no longer reflect market realities, creating direct difficulties for business operations and compliance.

One major issue lies in value-added tax (VAT) policy. The current method of VAT declaration for gold trading and jewelry manufacturing, which follows the direct calculation approach, has revealed significant shortcomings. Existing regulations do not fully account for processing and manufacturing costs - which typically make up 25 to 35 percent of the value of jewelry products - when calculating input costs for determining taxable value added.

This results in a higher taxable value than actual, discouraging businesses from investing in technology and craftsmanship.

Another major concern relates to legal risks surrounding gold sourced from the public and anti-money laundering regulations. Due to the lack of clear guidelines on mobilizing and purchasing gold held by individuals for use as production materials, businesses face constant risks in conducting transactions.

Verifying the origin of assets from individuals selling gold remains extremely challenging in the absence of a synchronized national database, leading to unintentional errors in anti-money laundering compliance - an issue widely faced across the industry.

The most significant challenge is the lack of alignment between legal requirements and real-world conditions. While regulations require verification of occupation and income, there are no clear mechanisms or guidelines to support this process, making full compliance difficult despite long-standing rules.

To address these issues, the association proposed issuing clear guidance on the scope of information that can be collected and establishing minimum criteria for transaction assessment. It also recommended shifting to a risk-based approach - focusing on transaction frequency, history, and unusual patterns - instead of requiring strict verification of income and occupation.

At the same time, the development of shared data systems, such as eKYC integrated with national population databases, would help improve identity verification accuracy and reduce the compliance burden on businesses.

Minh Huong