Dubai Diamond Exchange Chairman Peter Meeus is highly critical of a proposed new 5% value added tax (VAT) on loose rough and polished diamonds in the United Arab Emirates (UAE). The tax, which is supposed to be imposed starting January 2018, “has created huge waves both in the UAE and in India which imports and exports from Dubai”, according to IDEX Online.
According to Meeus, the emirate has become the world’s third-largest diamond trading center – jumping from $300 million about 15 years ago to $26 billion in 2016. Under the new tax, “Indians importing rough diamonds would face a 5.25% tax payment on rough goods with the UAE’s planned 5% VAT rate plus given the 0.25% Goods and Services Tax (GST) introducing in India”. Meeus said that “everything that had been built up in Dubai over the past decade or so would be damaged”.
Ahmed Bin Sulayem, Chairman of the Dubai Multi Commodities Centre (DMCC), is also said to be critical of the 5% tax, “saying it went against the principles of a tax-free setting for diamond trading”.
