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Afghan Jewelers Complain about High Taxes

in Afghan Business

Afghan Jewelers Complain about High Taxes

Huge taxes and lack of market for locally made jewellery have left the industry struggling in the capital, Kabul-based traders complain. But the Ministry of Finance says jewellers are taxed in line with the relevant law.

A decade ago, most of goldsmiths would make and repair jewellery using old methods, but now the art has considerably improved. While retaining their traditional brilliance, the artisans have embraced modernism.

In the 1970s, Iranian, Russian and Arabian gold ornaments were all the rage among Kabul’s women, but later imports from Singapore, Kuwait, Egypt and Bahrain started flooding the local market.  

Craftspeople say more that Afghanistan meets only 30 percent of its demand for gold ornaments — 21 or 19 carats per gram. The rest of the items are imported — notably from Dubai. Egyptian and Kuwaiti ornaments include 88 percent and the Arabian variety 79 percent of of pure gold.   

Hamid Salehzada, a jeweller in the capital, said the business had witnessed a huge boom in recent years. “I have hired more than 10 workers and the gold ornaments they are making are in Saudi Arabia,” he told Pajhwok Afghan News. He has imported modern gold-manufacturing machinery from Dubai and the Pakistani port city of Karachi.

Haji Noor Mohammad Rezai, the Kabul Jewellers’ Association head, recalled that most of Afghans returned home from neighboring countries after the formation of the transitional administration in 2002, when Kabul had only two gold shops.

Only damaged and second-hand items such as bracelets, chains, rings and necklaces were repaired and designed in the capital at that point in time. The ornaments were sold 10 to 15 percent cheapert than market prices.      

Abdul Navid, who was purchasing a bracelet for his fiancée, said he had purchased $5,055.6 (250,000 afs) gold in one year after his engagement. “I’m more focused on quality than on elegance and style. Quality means I could resell it anytime.”

Meanwhile, the association said a tax of $1,600 to 1,800 was being paid on one kilogram of gold, compared to $600 in the past. They warned the industry might collapse due to inordinately high taxes, the absence of market and government support.   

But Aziz Shams, the finance ministry spokesman, dismissed the complaints as baseless, saying the government was supporting the business and the industry was currently flourishing more than ever before.

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