Gold Tax, Jewelry Trade Challenges Feature at Dubai Precious Metals ConferenceApril 10, 18
(IDEX Online) – The DMCC held the 7th edition of its industry-leading annual Dubai Precious Metals Conference (DPMC) on Monday, with more than 300 participants listening as speakers and panelists from the precious metals sector discussed issues and opportunities critical to the future of the worldwide trade.
Following the opening speech by DMCC CEO Gautam Sashittal, the conference keynote speech was delivered by Lord Dr Hastings of Scarisbrick CBE, Global Head of Citizenship, KPMG. "If you want to build a sustainable future, then having values and operating ethically and transparently is critical," he said. "You can sign declarations on sustainability but actually creating sustainable development is another step. It is about building a decent and dignified future for the people you serve. The challenge is not about what the metals are worth, but what we give back to the communities, and the freedom and dignity we provide for them.”
At the first panel of the day on ‘The Evolution and Impact of Taxation on Gold’, panelist Chandu Siroya Vice Chairman of the Dubai Gold and Jewellery Group (DGJG), said: "We are seeing many effects from the impact of 5% VAT after the first three months. A lot of companies didn't sell for the first 20 days after the VAT came in, and only later got back to selling. The unique structure of Dubai where 85% of gold jewelry is for export, means it is creating uncertainty. We also saw that around 20 offices became available for rent in the gold souk. Unfortunately, the market is down significantly, both at the wholesale and retail levels."
The next panel debate focused on Responsible Sourcing – Expectations and Reality. Tyler Gillard, Manager of Sector Projects, Responsible Business Conduct Unit, Investment Division at the OECD said in a message to the conference: “We have worked closely with DMCC, and the gold industry, since 2011 on implementation of responsible sourcing. Investors as well as banks are increasingly expecting to see evidence of responsible sourcing before doing any business with clients. Consumers are demanding it. So essentially, now responsible sourcing is no longer an option, it is a commercial requirement.”
Of particular interest to the jewelry industry was the panel debate on the subject of ‘Challenges in The Jewellery Sector’, and moderated by Chandu Siroya. He said: "There are many challenges facing the jewelry industry. These include the responsible and ethical sourcing of gold. There is the problem of lower availability of skilled craftsmen because younger people are looking to work in other industries so it's difficult to attract them. Attracting finance and the costs of doing business, including marketing costs which are relatively higher for small and medium-sized firms, is also one of the challenges. There is the issue of the threat to physical stores of online sales, the problem of counterfeit jewelry and finally finding a way for the use of lab-grown diamonds in jewelry that can be embraced by all - from manufacturers to consumers."