Gold and silver retailers across Nepal have agreed to resume their business from Friday after reaching a five-point agreement with the government. The Federation of Nepal Gold and Silver Dealers Association (FENEGOSIDA) announced the suspension of protest activities following successful negotiations on Thursday.
The protest had begun in response to new taxes introduced in the upcoming fiscal year’s budget, which imposed a 2% luxury tax on gold and gold jewelry and a 13% value-added tax (VAT) on diamond-studded ornaments. Jewelers argued that the levies would significantly impact both consumers and businesses, prompting nearly a month of industry-wide shutdowns and demonstrations.
As part of the agreement, a task force will be formed to address traders' concerns, with its secretariat based within the Ministry of Finance. The government agreed not to implement the newly introduced luxury tax and VAT increases until the task force completes its review and submits its report.
The two sides also agreed to reassess the classification of gold and gold ornaments as luxury goods, with the aim of potentially revising the current definition. Other points of consensus include streamlining gold and silver distribution regulations, enabling easier access to domestic precious metals and gemstones, and improving the import process by sourcing gold from nearby trading centers and making it available through commercial banks.
The task force will also oversee the effective implementation and if necessary, the revision of the 2011 Gold Import and Distribution Procedure.
Thursday’s discussions were attended by senior government officials including Uttarkumar Khatri, Joint Secretary at the Ministry of Finance; Bipin Acharya, Joint Secretary at the Ministry of Industry, Commerce, and Supplies; Madan Dahal, Director General of the Inland Revenue Department; Mahesh Bhattarai, Director General of the Department of Customs; and Rajendra Bhattarai, Director at Nepal Rastra Bank. Representing the industry were Arjun Rasaily, President of FENEGOSIDA, and Kisan Sunar, President of the Federation of Nepal Gold Silver Gem and Jewellery Associations (FNGSGJA).
