GEORGE TOWN: The Penang Goldsmith Association (PGA) is projecting the export of Malaysia’s gold jewellery at an estimated RM6.7bil this year, up from an earlier forecast of RM4bil in March.
PGA adviser Joeson Khor told StarBiz that the zero-rated goods and services tax (GST) would help to boost the value of gold jewellery export this year.
When GST was imposed, gold jewellery manufacturers have to register for the approved jewellers scheme, approved traders scheme, or approved traders and manufacturers scheme to import gold bars.
Both small and medium-sized gold jewellery manufacturers and exporters would have to spend between RM700,000 and RM1mil in GST to import the gold bars used to make jewellery-related products.
“It affected the small and medium size gold manufacturers’ capability to export and stay competitive in the market, influencing the volume and value of gold jewellery products exported.
“Now that GST has been zero-rated, we can expect an increase in the overseas sales of gold jewellery products,” he pointed out.
Khor did not expect an increase in the domestic sales of gold jewellery due to the economic slowdown.
“We hope business will pick up in the second half 2018 and are very positive on the retail sales in 2019.
“A lot will also depend on whether gold products will come under the sales and service tax (SST) when it is reintroduced in September,” he added.
The present gold price of US$1,290 per ounce is expected to remain stable, Khor noted.
On the introduction the SST in September, the Malaysia Gold Association (MGA) has urged the federal government not to impose SST on all gold items.
“We want the situation to be like what it was prior to the introduction of GST. If there is no SST, the demand for gold products would increase and help to stimulate the local gold bar investment and gold jewellery business.
According to MGA secretary Datuk Louis Ng, the MGA has requested to meet with the Finance Ministry to discuss the matter.
MGA expected that with the zero-rated GST, the sales of gold jewellery in the country would improve. “However, the business of investment gold bar is expected to be flat,” Ng added.