The 10-percent rate has only been applied since January 1, when the ministry raised the tax from zero to help stabilise the domestic gold market.

In a proposal sent to the ministry early this week, the Gold Traders Association’s general secretary Dinh Nho Bang said that, since all of the gold in Vietnam was imported, imposing a 10-percent export tax or otherwise limiting gold exports might exacerbate the trade deficit, as well as encourage smuggling and increase the drain of US dollars out of the country.

Bang also said that no other countries imposed such a high tax on the export of gold, this would cause made-in-Vietnam jewelry to lose competitiveness and jeopardises jobs in the jewelry industry.

Under Circular No 184, the tax rate is imposed on gold of purity between 99 and 99.99 percent and gold jewelry of above 99 percent and also on gold bars with purity of under 99.99 percent.

Bang argued that Vietnam lacks the equipment and technological expertise to assess purity beyond 99.9 percent, although the effect of the circular is simply to impose the tax on all unprocessed gold of purity greater than 99 percent.

Since the industry worldwide recognises that no gold achieves full 100-percent purity, 99.99 percent is simply synonymous with saying full purity.