New Tax Method to Revive Sri Lanka’s Gem & Jewellery Sector 📈

The National Gem and Jewellery Authority (NGJA) has introduced a revised tax calculation framework for gem imports to reverse the industry decline seen in 2024–2025. The new system replaces value-based taxation with a simplified, weight-based fixed-rate model. • Revised Tax Structure Precious Stones: Reduced to approximately Rs. 57,195 per kg. Semi-Precious Stones: Set at approximately Rs. 3,200 per kg. Previous Regime: Importers formerly faced 18% VAT and 2.5% SSCL on the full declared value, which led to sharp declines in import volumes and raw material shortages. • Industry Impact & Sector Benefits Lapidary & Manufacturing: Improved supply of raw stones for cutting and polishing and jewellery manufacturing, addressing previous underutilisation of facilities. Export Performance: Aims to boost re-export volumes to major markets (USA, Europe, East Asia) and reclaim global market share from competitors like Thailand and Dubai. Employment: Expected to stabilize livelihoods for thousands of skilled workers in processing and retail, particularly in rural and semi-urban regions. • Economic Context Forex Earnings: The move is strategic for strengthening the balance of payments and stabilizing the exchange rate through high-value gem and jewellery exports. Strategic Recommendation: Authorities are also considering the reintroduction of Income Tax exemptions on gem exports to further enhance Sri Lanka’s competitiveness as a global trading hub. _Note: This summary is based on recent announcements by the NGJA._