Saturday, September 29, 2018

Japan braces for gold smuggling rush in shadow of tax hike

As Japan prepares to raise the consumption tax for the first time in half a decade next year, many feel gold smuggling will also get a boost. When the tax was last increased in 2014, to 8% from 5%, smuggling of gold jumped as criminals quickly realized how to game the system.

Hong Kong does not tax gold. Buyers can use mules and the tax component becomes pure profit.
With the consumption tax set to rise to 10% in October 2019, margins will grow even fatter for criminals.
Japan is considered the "go-to place" for gold smugglers. In 2017 seized gold amounted to 6,236 kg, a 47-fold increase. Japan even exported 215 tons of gold in 2017, despite being a producer of only tens of tons domestically. That was almost double the 114 tons exported in 2014. The scale of smuggling is said to exceed 150 tons.