South Korea accepts KDE Appeals
Abolished
a 26% Diamond Tax
World
Federation of Diamond Bourses (WFDB) President Ernie Blom has praised the work
of the WFDB-affiliated Korea Diamond Exchange in persuading the government to
abolish a high diamond tax instituted more than four decades ago. Following
five years of talks and intensive work by the Korea Diamond Exchange (KDE), the
South Korean government in December abolished a 26% Individual Consumption Tax
on imported polished diamonds that dates back to 1976, said bourse Chairman Nam
Chang-Soo.
"Now,
South Korean diamond importers will have a simplified tax regime: a 5% import
tax and 10% Value Added Tax, said Nam Chang-Soo. “We hope that the abolition of
the ICT and simplified taxes will have a very positive effect on diamond
jewelry sales in South Korea. I believe that we will see a big increase in
sales of polished diamonds and of diamond jewelry," he said, adding that
annual sales of polished diamonds in South Korea amount to around $2.5 billion,
while diamond jewelry sales are in the order of $5 billion per year.
"Together
with the WFDB, we aim to build improved business practices and to show diamonds
in a positive way to consumers in South Korea. The ICT restricted the domestic
jewelry industry’s growth and competitiveness globally. The abolition of ICT
will boost the growth of the jewelry industry locally and worldwide. It has not
only opened the door for members of the local jewelry industry, but also for
foreign diamond manufacturers and dealers to establish a foothold in the
market.
"I
am also confident that this amendment in tax structure will lead to increased
tax revenue from higher official imports of diamonds and will curb underground
business. This will also lead to the revitalization of the jewelry industry and
finished diamond and precious stone-set jewelry with competitive prices for
global markets. I believe this will also will lead to increased consumption of
loose diamonds in the country and create higher demand for diamonds in the
country."
WFDB
President Blom said: "It is always encouraging to see governments
abolishing taxes, which only serve to restrict sales, and to make tax regimes
simple and logical. I congratulate the KDE and its Chairman Nam Chang-Soo for
their hard work and persistence over the past five years in putting the case to
their government.
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