South Korea Abolishes Special Tax on Diamond Imports

Economy
06/02/2019 16:27

The South Korean government, following years of negotiations with the Korea Diamond Exchange (KDE), has abolished the special 26% Individual Consumption Tax (ICT) on imports of loose polished diamonds exceding KRW 5,000,000 ($4,460), leaving in place only the simplified rate of 5% import tax and 10% VAT which already applied to all imports. KDE President Nam Chang-Soo said, "We hope that the abolition of the tax will have a very positive effect on diamond jewelry sales in South Korea."

He added, "Together with the World Federation of Diamond Bourses (WFDB), we aim to build better business practices and to show diamonds in a more positive way to consumers in South Korea. Traditionally, consumers have not trusted the diamond trade and had negative feelings towards it. But I believe that trust will now rise and that we will see a big increase in sales of polished diamonds and of diamond jewelry." The KDE states that the abolition of the ICT will boost the growth of the local jewelry industry and has opened the door for foreign diamond manufacturers and dealers to establish their foothold in the market. The KDE president says, "The tax change on loose polished diamonds and precious stones has created plenty of opportunities for foreign companies in our country.

He also expressed his confidence that this amendment in tax structure will lead to increased tax revenue from bigger official imports of diamonds and will curb underground business. Annual sales of polished diamonds in South Korea amount to around $2.5 billion, he added, while diamond jewelry sales are in the order of $5 billion.

Photo: Shruti Mehta, @DiamondsAndAntwerp