KUALA LUMPUR: Would gold lose its glitter if it becomes more expensive? This is the worry expressed by goldsmiths nationwide who oppose a proposed law that would require them to grade gold jewellery.
Furthermore, Malaysia may lose its edge over other competitors if importers find it cheaper to buy from other countries.
For this reason, goldsmiths are urging the authorities not to introduce the Hallmarking Act.
Coupled with the planned Goods and Services Tax, the proposed law would push the price of gold out of the reach of many people, they say.
The Act, proposed in 2004, provides for a grading system for jewellery products, and requires goldsmiths to send their products to a certifying body to analyse and verify the content.
A certificate will then be issued to state the exact content of the gold products, such as whether it is 916 carat gold or some other mix.
Currently, Malaysia has one of the cheapest prices for gold jewellery and is a major exporter of such jewellery.
Goldsmiths fear that any increase in price may discourage tourists from buying here, leading them to turn their attentions elsewhere.
Malaysian Indian Goldsmith Association spokesman Abdul Rasull Abdul Razak said the extra costs incurred, including that from the continually rising gold price, would be passed on to consumers.
There will be an increment of 20% if the Government introduces the Hallmarking Act and Goods and Sales Tax (GST).
Abdul Rasull added that currently only Britain and Cyprus have implemented compulsory hallmarking, and both countries are not leading world gold exporters or producers.
He said the Trade Descriptions Act 1972 and Precious Metal Article 1994 ensure the quality of the items at present.
He said the association was drafting a memorandum to be handed over to Prime Minister Datuk Seri Abdullah Ahmad Badawi.
Kuala Lumpur, Selangor, Negri Sembilan and Pahang Goldsmiths Federation president Ng Yih Pyng said hallmarking would have a negative impact, especially in the eyes of foreign buyers.
Some of the biggest buyers of Malaysian-produced gold items come from Singapore, West Asia, Europe and the United States, Ng said.
Buyers from these countries may begin to wonder why the Government needs to grade the gold products manufactured in Malaysia.
Currently, Malaysia has a good reputation and importers have their own system of grading. Our gold has earned a good name in the worldwide market.
It is because of the good standard of gold available in Malaysia that tourists flock here to buy gold products, Ng added.
Last December, the Federation of Goldsmiths and Jewellers Association of Malaysia submitted a memorandum to the ministry to review the Act.
Deputy Domestic Trade and Consumer Affairs Minister Datuk S. Veerasingam said the Government understood the sentiments expressed by the goldsmiths, adding: We have not finalised whether to go ahead with the Act.
He said the Government had considered the views of the goldsmith associations and was reviewing the matter.
The goldsmiths can rest assured that the Government will not do anything to jeopardise their business, Veerasingam said.
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