JAPAN SEEKS TO CRACK DOWN ON GOLD SMUGGLING
The Yomiuri ShimbunThe Finance Ministry is attempting to halt a steep increase in gold smuggling by strengthening countermeasures at points of sale.
Because smugglers make money from the margin they gain by avoiding consumption taxes, ministry officials fear smuggling will increase when the consumption tax rate is raised to 10 percent this October. In the future, gold buyers will be required to copy and store sellers’ identification documents. Increased enforcement at the border, including crackdowns at customs stations, is also expected.
People are required to declare gold brought from overseas at customs and pay consumption tax on it. Smugglers purchase gold in places where it is not taxed, such as Hong Kong, then profit by pocketing the consumption tax that is added to the price when gold is sold in Japan.
Gold smuggling increased dramatically when the consumption tax rate was raised from 5 percent to 8 percent in 2014. In 2017, 1,347 incidents were discovered, in which about 6.2 tons of gold were seized. This is about 110 times the number of incidents discovered in 2013 before the tax hike, and about 50 times the amount seized.
The Finance Ministry, which has jurisdiction over customs matters, plans to require buyers to make copies of sellers’ ID documents, such as passports or driver’s licenses for individuals and registration papers for corporations. These copies would need to be kept so sellers can be tracked if gold is found to have been smuggled.
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