High import duties threaten Guyana’s gold & jewellery hub ambitions – MNR Technical Consultant

– says high taxes make Guyana uncompetitive

As Guyana seeks to become a globally recognised gold and jewellery hub through the El Dorado Reimagined brand, the country first has to address its high importation taxes and duties on equipment and other materials needed for the design and production of jewellery. This was the view expressed by Technical Consultant at the Natural Resources Ministry, Dominic Gaskin, during the recent episode of the Starting Point podcast. Back in May of this year, President Dr Irfaan Ali launched the ‘El Dorado Reimagined’ brand with the aim of positioning Guyana as an international powerhouse for high-quality gold products and jewellery manufacturing by 2030. But according to Gaskin – a jeweller himself and one of the key officials leading the El Dorado Reimagined campaign – there are a number of issues that the country must first fix in order to truly be recognised as a global hub. Among those hurdles he pointed to is the fiscal framework, which he says has largely resulted in the lack of development in the local jewellery industry over the years. “I’m talking about a framework that has been in place since I think maybe the 1970s that we haven’t really revisited, and we need to at this point if we want to succeed in realising the vision of Guyana becoming a gold and jewellery hub… I’m talking mainly about import taxes and duties on various jewellery-related items. Currently, those rates are extremely high by any standards, and it makes us uncompetitive as jewellers,” he asserted.

According to Gaskin, most, if not all, jewellery-producing countries in the world require some sort of raw material to be imported, whether equipment or even the minerals themselves, to make the jewellery. In Guyana’s case, it is no different, but he noted that the importation duties here are driving up costs, thus making local manufacturers uncompetitive. “There’s always something you need to import, and if we have to import items at 60 per cent duties and 50 per cent duties, we cannot compete with established jewellery centres around the world that are either doing those free of any duties or [at] 5 per cent and 10 per cent duties. So, that’s almost a non-starter for becoming a gold and jewellery hub,” he emphasised. Gaskin further believes that by addressing the high duties, the Government would also tackle the issue of smuggling. “Those high levels of taxation encourage smuggling of items into the country because, to the best of my knowledge, I don’t think that the authorities are collecting revenues from the importation of these very highly taxed items.” “What we’re suggesting is [to] change the bad policies that led to the smuggling in the first place because, obviously, the market cannot afford jewellery with those high rates of tariffs, and we can’t continue with that if we want to be competitive. So, that needs to be revisited,” the MNR technical consultant posited. Other areas that he also identified as hurdles to the development of the local jewellery sector include security, financial and logistic services. He explained that given the high value of gold and other precious metals used to make jewellery, Guyana needs to become a safe and secure place to buy and sell jewellery if it wants to enter the global market.

ICT infrastructure
Similarly, Gaskin highlighted the importance of having the necessary Information and Communications Technology (ICT) infrastructure in place to accommodate reliable and efficient financial transactions on an international scale. The same logistical efficiency, he outlined, would also be required from both the business services side and the Government’s trade facilitation side. These and other similar issues hindering the local jewellery industry will be addressed in a comprehensive strategy. That strategy will see the industry transformed into a more technology-driven, modern sector with higher productivity. It contains 15 initiatives designed to address the various gaps and deficiencies in the sector. According to Gaskin, a special unit has been established within the Guyana Gold Board (GGB) to oversee and implement that development strategy for the sector under the El Dorado Reimagined brand. In fact, he revealed that “…the idea is to have an international firm that specialises in marketing jewellery internationally develop a strategy for us. And that will now become the blueprint for how the brand is promoted and positioned globally.” The El Dorado Reimagined brand is essentially a licence that is issued to qualifying jewelers who meet certain criteria. Once approved, those jewellers can promote their businesses and products under the brand and will also benefit from international market access as well as recognition. In order to be licensed with this brand, jewelers have to meet a set of criteria, including compliance with the relevant standards where applicable. Previously, there was only the Guyana Gold Standard in place for gold jewellery, but now similar standards have been established for other precious metals, including silver, platinum and palladium.

In addition, there are also standards for diamonds and other high-purity metals. “If you sell those products and want to be licensed under the brand, then you have to be in compliance with those standards that apply to the products that you sell,” Gaskin stated.

Best practices
Moreover, there are a number of other brand criteria that relate to industry best practices. These include having detailed documentation for transactions such as receipts with descriptive details of the items and payment methods. Establishing business premises with proper signage displayed is also another requirement.
However, one of the most important criteria of the branding is the use of legally obtained raw materials such as gold.
“Because we do have a problem in Guyana with undeclared gold…the brand also seeks to ensure that goldsmiths or jewelers who are registered under the brand are using gold that has been ethically and legally sourced. And in Guyana, that pretty much means bought from the Guyana Gold Board,” Gaskin explained.
But while the El Dorado Reimagined brand is a marketing device to position Guyana’s gold in the international market, it is also being promoted locally to customers as an offering of quality products, services, and standards.
Similarly, the Government is also promoting the brand to jewelers and goldsmiths. “We want them to also appreciate the importance of the brand and become licensed under the brand. And we will be helping them. If during, let’s say, the initial audit of their application process, deficiencies are identified. We’re not saying, ‘Okay, you can’t be licensed ‘. The idea is to work with our local goldsmiths to get as many as possible licensed under the brand,” the technical consultant noted. That licensing process has begun, and though he is not part of that application vetting process, Gaskin noted that a number of goldsmiths and businesses have already applied, including his own company.