SA finalises diamond export duty

SA finalises diamond export duty

JOHANNESBURG – South Africa has finalised a cut in its export levy on diamonds to 5 per cent from 15 per cent, but tightened exemptions in an effort to boost local processing of gems.

Finance Minister Trevor Manuel had previously announced the changes in export tax, but introduced a bill with the provisions into parliament on Tuesday. As a money bill, it can only be rejected or approved by parliament, but cannot be amended.An export tax is designed to promote the local jewellery industry, but diamond producers said a high level of 15 per cent would encourage smuggling.”The proposed 5 per cent rate is high enough to deter unpolished exports without hidden benefits of smuggling,” Manuel said in a speech introducing the bill.According to informal police estimates, diamond smuggling costs are between 2.5 and 5 per cent of gross diamond values, he added.De Beers is the dominant producer in South Africa, producing 14.6 million carats of diamonds in the country last year.De Beers is 45 per cent owned by mining group Anglo American Plc, 40 per cent by the Oppenheimer family and 15 per cent by the government of Botswana.Nampa-ReutersAs a money bill, it can only be rejected or approved by parliament, but cannot be amended.An export tax is designed to promote the local jewellery industry, but diamond producers said a high level of 15 per cent would encourage smuggling.”The proposed 5 per cent rate is high enough to deter unpolished exports without hidden benefits of smuggling,” Manuel said in a speech introducing the bill.According to informal police estimates, diamond smuggling costs are between 2.5 and 5 per cent of gross diamond values, he added.De Beers is the dominant producer in South Africa, producing 14.6 million carats of diamonds in the country last year.De Beers is 45 per cent owned by mining group Anglo American Plc, 40 per cent by the Oppenheimer family and 15 per cent by the government of Botswana.Nampa-Reuters

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