As domestic gold prices hit record highs and access to raw gold remains restricted, the Ministry of Finance has proposed reducing the export tax on jewelry and fine-art gold products from 1% to 0%.

In a recent submission to the government, the Ministry of Finance proposed amendments to Decree No. 26/2023/ND-CP issued on May 31, 2023, which regulates Vietnam’s preferential import and export tariffs. The proposal aims to reduce the export tax rate for gold jewelry and fine-art gold under codes 7113.19.10, 7113.19.90, 7114.19.00, and 7115.90.10 from 1% to 0%.

To support the domestic gold jewelry industry, the decree already allows a 0% preferential import tax on unprocessed gold. However, according to the State Bank of Vietnam, no businesses have been granted licenses to import raw gold for jewelry production since 2012.

The finance ministry emphasized that the proposed tax reduction aligns with principles established by Vietnam’s Law on Export and Import Duties. The new 0% rate falls within the permitted range (0-10%) for gold jewelry and fine-art items.

If adopted, the new policy could reduce state budget revenue by an estimated $3.3 million annually (approximately 79 billion VND), based on 2024 export figures.

The drafting agency noted that the gold market has experienced strong fluctuations in both domestic and global prices. According to the World Gold Council, global gold prices rose by 38% to 39% in the first quarter of 2025 compared to the same period in 2024.

In Vietnam, data from the General Statistics Office shows that domestic gold prices have surged since early 2025. The gold price index increased by 43.62% in Q2 2025 compared to the same period in 2024, and by 37.4% over the first six months of the year. Jewelry prices have followed the same upward trend.

These price increases have impacted global gold demand, particularly for jewelry. In 2024, Vietnam’s total gold consumption reached 55.3 tons, slightly down from 55.5 tons in 2023. Jewelry and fine-art gold accounted for 13.22 tons, a 13% drop year-on-year - the sharpest decline among ASEAN countries.

Due to limited access to raw gold, businesses have had to rely on domestic sources, where supply is tight and prices significantly higher than global rates.

“At its peak in mid-May 2025, SJC gold bars were priced nearly 19 million VND (about $770) per tael higher than global rates. The price gap for plain gold rings reached 14 million VND ($568) per tael. These disparities have weakened the competitiveness of Vietnamese gold jewelry in international markets,” the finance ministry noted.

As such, the ministry stressed the importance of lowering the export tax to help businesses cut costs and improve the global competitiveness of Vietnamese gold products. In the current environment of raw material shortages and high domestic prices, this move could also incentivize converting hoarded gold into value-added exports.

As of this morning (August 26), domestic gold prices reached new record highs. SJC gold bars were sold at 127.7 million VND per tael (approximately $5,180), while plain gold rings hit 122.6 million VND per tael ($4,970) – the highest levels ever recorded.

PV