Home ›› 24 Jun 2022 ›› Front
The amount of gold entering Bangladesh under baggage rules has been going up, and this in turn is disrupting the country’s remittance inflow, according to the latest report by a government intelligence agency.
Expatriates – with the help of a syndicate – are bringing in gold jewellery and bars in bags instead of their earnings from abroad, depriving Bangladesh of foreign currency and causing the remittance inflow to decline.
Under the existing baggage rules, a person does not have to pay any duty to bring in gold ornaments weighing up to 100 grams (8.5 bhori) when they return home. For bringing in a gold bar weighing up to 234 grams (20 bhori) one has to pay a duty of Tk 2,000 per bhori.
Though gold bars exceeding the above mentioned weight limit are considered contraband, there are no specific regulations under the baggage rules for bringing in gold jewellery. Using this loophole, many in-bound travellers are bringing in gold ornaments, even paying extra duty and tax.
The intelligence report mentions that a syndicate is working from abroad to facilitate this whole process. This racket is using a group of migrant workers as carriers who work for hefty commissions.
This racket also buys up USD at an elevated rate from home-bound migrants, but pays them in gold instead of cash. These migrants then carry the gold into Bangladesh, usually sell it to a local syndicate agent, and recover their cash.
The racket is using the greed of a section of home-bound migrants to bring in gold through the abuse baggage rules.
The report further mentions that the migrants usually make profits on multiple fronts if they choose to bring in gold into the country instead of remitting their earnings.
First, the home-bound migrants can earn a hefty profit by buying gold at a cheaper price, then selling high in Bangladesh. Second, they make a higher amount of cash while exchanging the USD compared to the bank rates.
And finally, under this loophole, a migrant does not have to pay any fees or charges for bringing their earnings home.
According to the report, the price of 24-carat gold in the international market ranges from Tk 58,000 to Tk 65,000 depending on the country. Gold is being sold at Tk 72,000 to Tk 78,000 in the domestic market per bhori with a duty of Tk 2,000.
Bangladesh received $188.53 crore in remittances in May this FY, which is a decline from $201.10 crore in April. The country received $217.10 crore in remittances back in May of FY21.
Recommending an amendment to the existing baggage rules, the report mentions that migrants bringing in gold abusing the baggage rules could further hurt Bangladesh’s remittance inflow through official channels.
Moreover, the gold entering the country is being smuggled to a neighbouring country. Under such circumstances, an amendment to existing rules redefining the weight ceiling of gold jewellery and an increase in related duty and taxes have become necessary, read the report.
