Dubai loses glitter as VAT tax crimps demand in city of gold

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By: Bloomberg |
Updated: April 10, 2018 3:45:49 pm


Gold demand in the UAE hasn’t recovered since the 2008 global financial crisis, and dropped to a 20-year low in 2017, according to the World Gold Council. (Photo: Flickr)

Demand for gold jewelry in the United Arab Emirates plummeted in the first quarter, and traders say they know the culprit: the value-added tax. Wholesale gold jewelry sales in Dubai, sometimes known as the City of Gold, fell 50 to 60 percent in the first quarter from a year earlier after VAT began on January 1, according to Chandu Siroya, vice chairman of the industry association Dubai Gold & Jewellery Group. Dubai’s historic souk marketplace of mostly jewelry traders even has space available for the first time in years, he said.

Gold demand in the UAE hasn’t recovered since the 2008 global financial…

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