Karachi, April 12, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has urged the federal government to permit gold exports with at least 20% value addition, a move it believes will revitalize the stagnant precious metals sector and significantly boost export revenues.
In its official budget proposals for FY2025-26, the KCCI highlighted several long-standing policy inconsistencies that are holding back gold and jewelry exports under SRO 760(I)/2013. The chamber pointed out that while this SRO allows duty and tax exemptions on precious metal imports for export, the necessary amendments in the Sales Tax Act were never implemented.
As a result, only imports under the Entrustment Scheme are exempt from sales tax under Entry No. 178 of the Sixth Schedule, whereas imports under the Self-Consignment Scheme and unsold jewelry remain subject to a high 18% sales tax.
This contradictory structure, the KCCI noted, has made gold trading unviable. Bullion imports attract an 18% sales tax, whereas locally manufactured jewelry is taxed at only 3%. This mismatch has created confusion in tax administration and driven a substantial portion of the industry into the informal sector, limiting export growth and discouraging formal trade.
The KCCI stressed that despite the SRO’s intent, gold exports have plateaued at a meager $50 million annually due to these policy mismatches. To resolve this, it has recommended aligning the Sales Tax Act with SRO 760(I)/2013 by amending Entry No. 178 to include “import of gold and unsold jewelry” under the exemption clause. Furthermore, the chamber called for the reinstatement of zero-rating for gold by restoring Entry No. 37 in the Sixth Schedule or introducing a 1% tax via the Fifth Schedule as an alternative.
Additionally, the KCCI suggested enforcing rules to prevent the return of unsold jewelry under export arrangements to avoid misuse of incentives.
By allowing gold exports with 20% value addition, KCCI believes Pakistan can significantly enhance its global competitiveness in the precious metals market. Streamlining tax policies will not only improve export efficiency but also formalize bullion trading, reduce smuggling, and foster greater investment in Pakistan’s jewelry sector.