KATHMANDU, June 8: Gold prices have hit record highs in the global market this week, largely due to fluctuations in the value of the US dollar. Analysts attribute this pressure on gold prices to investors seeking safe haven amid the volatile dollar. Although prices dipped on the second and fourth days of the week, they surged on other days. Friday marked a new milestone as the last trading day of the week saw record-setting prices.

Similarly, in the domestic market, gold prices also soared to new heights this week. The government's decision to increase the customs duty on gold in the budget for the upcoming fiscal year contributed to last week's price hike, and this week, domestic prices reached another record.

While gold prices experienced fluctuations throughout the week, they saw a significant rise on the fifth day. On Friday, the closing day of the trading week, the price of hallmark gold reached a peak of Rs 145,000 per tola, setting a new record. This represented a Rs 3,000 increase per tola compared to the beginning of the week.

Additionally, the price of silver also saw an upward trend in the domestic market of Nepal this week. Starting at Rs 1,850 per tola on Sunday, the price climbed to Rs 1,900 per tola by the end of the trading week on Friday, marking an increase by Rs 50 per tola.

Entrepreneurs urge govt to revoke increased customs duty on gold imports

Entrepreneurs have demanded the cancellation of the proposed 5 percent increase in customs duty on gold imports in the next fiscal year's budget. The Federation of Nepal Gold Silver Gem and Jewellery Associations (FNGSGJA), the  Federation of Nepal Gold and Silver Dealers' Association (FENEGOSIDA), and Federation of Handicraft Associations of Nepal (FHAN) submitted a memorandum to Finance Minister Barshman Pun, urging the reversal of this decision on Friday.

Kishan Sunar, president of FNGSGJA, stated that the government's decision to increase the customs duty on gold imports from 15 percent to 20 percent in the 2024/25 budget prompted the federation to demand its cancellation. Sunar highlighted that last year’s Customs Bill 2080 BS also raised the duty, making it increasingly difficult for local entrepreneurs to compete in the global market. He said that the lack of consultation with entrepreneurs has exacerbated their challenges, putting them in a position where they are struggling to sustain their businesses.

Sunar pointed out that over 20,000 gold and silver entrepreneurs in Nepal directly and indirectly employ more than 200,000 people. He argued that raising the customs duty above the Indian market level would adversely affect consumers and businesses due to the open border with India, potentially increasing illegal transactions.

They argued that with gold being imported on a quota system, any increase in customs duty would reduce the government's revenue from gold imports.

The memorandum mentioned that under the gold import guidelines issued by the Nepal Rastra Bank, gold is imported through banks at a rate of 20 kg per day. The continuous increase in customs duty has resulted in lower-than-expected imports, reducing the state's regular customs revenue. The entrepreneurs in the memorandum have claimed that this situation has failed to protect legitimate businesses while encouraging illegal transactions. The entrepreneurs urged immediate correction of the Customs Bill 2081 BS to prevent the displacement of gold and silver entrepreneurs nationwide.