DHAKA, Jan 14, 2026 (BSS) -  National Board of Revenue (NBR) Chairman Md Abdur Rahman Khan today said restoring discipline in the country’s jewellery sector is both essential and achievable through policy reform, digitalisation, and close cooperation between the government and industry stakeholders.

Speaking at a “Meet the Business” dialogue with leaders of the Bangladesh Jewellers Association (BAJUS), the NBR Chairman said the government’s objective is to enable businesses to operate smoothly while ensuring transparency, compliance and fairness in taxation. 

NBR Member (VAT Policy) Md Azizur Rahman gave the opening remarks while BAJUS President Enamul Haque Khan also spoke among others.

“Our belief is simple—businessmen should focus on business, and our responsibility is to make that path easier, more transparent and rule-based,” he said.

Describing jewellery as one of the country’s oldest industries, the Chairman noted that the sector is deeply connected to social, emotional and financial security. However, despite multiple initiatives, the sector has not progressed as expected due to the absence of discipline and structured systems.

He recalled that for a long period formal gold imports were not allowed, resulting in widespread informal inflows. Although import policies were later introduced and taxes significantly reduced.

Rejecting the notion that Bangladesh’s relatively young age as an independent nation explains governance gaps, the NBR Chairman cited examples of countries that progressed rapidly by enforcing discipline and rule of law from the outset.

“The gap is not time—it is discipline. Countries that established strong systems from day one have moved far ahead,” he added.

Addressing the concerns from BAJUS, the Chairman said the purpose of the dialogue was to listen directly to obstacles preventing compliance, particularly those related to tax, VAT, customs and procedural complexities.

“Not all problems fall under NBR’s authority. Banking issues require engagement with Bangladesh Bank, and import permissions involve the Ministry of Commerce. But tax-related issues are our responsibility, and we will address them,” he said.

On value-added tax (VAT), the Chairman agreed with BAJUS leaders that the existing 5 percent VAT on total jewellery sales value is not rational.

“Jewellery value addition is primarily labour-based. Imposing VAT on the gross value—even at a lower rate—results in an excessive burden,” he said.

He explained that under standard VAT principles, applying 15 percent VAT on actual value addition would result in an effective tax incidence of around 1–2 percent, and sometimes even lower for high-value products like gold.

“If that is the reality, there is no justification for arbitrarily imposing 5 percent on total value,” he said, calling on BAJUS and professional experts to propose a practical formula so that legal adjustments can be made, possibly in the upcoming budget.

Regarding the 1 percent minimum turnover tax, the NBR Chairman reiterated his opposition to taxing turnover rather than profit but acknowledged that the measure exists due to longstanding mistrust between taxpayers and tax authorities.

“To break this cycle, we want exact transactions to be fully recorded. If necessary, we will develop a simple digital system tailored for small jewellery businesses,” he said.

He added that once real-time, accurate records are ensured, the need for minimum turnover tax would gradually disappear.

Highlighting inconsistencies in financial reporting, the Chairman noted that many businesses report high turnover to banks to secure loans but declare losses to tax authorities.

“This duality must end. Account preparers, auditors and chartered accountants must ensure that no fabricated or misleading accounts are submitted,” he said, warning that even small deviations from the system generate widespread non-compliance.

On gold supply and withholding VAT, the Chairman said the unique nature of gold transactions requires careful review. He supported mandatory VAT-inclusive pricing to reduce compliance complexity and consumer resistance.

He also advocated broader access to importer licences, stating that increased competition and openness would enhance discipline.

“The more we restrict, the more problems we create. Discipline improves when systems are open and rule-based,” he said.

Addressing export-related concerns, the Chairman reaffirmed that duty drawback is a fundamental right for exporters.

“If an exporter imports raw materials by paying duties and then exports finished goods, there is no principle under which duty drawback can be denied,” he said.

He suggested introducing controlled mechanisms—such as time-bound export commitments supported by deposits or guarantees—to allow duty-free imports while preventing misuse.

The NBR Chairman proposed forming technical committees comprising representatives from NBR, customs, BAJUS, Bangladesh Bank and the Ministry of Commerce to develop standard operating procedures for sourcing, manufacturing and exporting jewellery.

He stressed the need to remove the stigma attached to the jewellery sector, noting that negative perceptions hinder access to banking and finance.

“Restoring discipline is not just an economic issue—it is about safety, credibility and the future of the next generation,” he said.

Concluding the dialogue, the Chairman said sustainable reform is possible only through mutual trust and collective effort.

“If we work together sincerely, discipline can be restored, risks can be reduced, and this sector can become a compliant, export-oriented and respected industry,” he added.