Indian government doubles gold import tax: a warning for us all

A few weeks ago we featured probably Ron Paul’s final and finest interrogation of the champion of that pseudo-religion that is monetarism, Ben Bernanke.

In that clip Ron Paul offered up a solution and a compromise:

“why don’t we allow currencies to run parallel… why wouldn’t we legalise competing currencies, why can’t people put this in a mattress [holds up a 1 ounce silver coin] and get 4-5 times as much of the value in a few years?”

Ben Bernanke’s reply was very telling:

“on alternative currencies nobody prevents you from holding silver or gold if you want to, its perfectly legal to do that”

To which Ron Paul responds:

“But Mr Chariman that’s not money when you pay taxes to buy a coin or you have capital gains tax

[emphasis ours]

Well, for the Indians Ron Paul can now add another tax to that list of things that inhibit gold from freely competing with paper currencies. As the WSJ reports the Indian government is going to impose a 4% import tax on gold coming into India:

MUMBAI — India, the world’s top gold consumer, Friday proposed to double the import duty on gold to 4% in a move aimed at helping the government to keep its current-account deficit under control but which may lead to a drop in demand for the yellow metal.

The move, announced by Finance Minister Pranab Mukherjee in parliament while presenting the federal budget for the fiscal year starting April, is significant as India imports nearly all its gold requirement. …

This illustrates Ron Paul’s point precisely – it’s simply not good enough for Ben Bernanke to talk about people already being able to buy gold when governments are always thinking up new ways to tax gold every-which-way to Sunday.

There needs to be a complete level field when it comes to consumer choice in the monies they freely choose to use. All taxes on precious metals should be removed to allow this to happen – like the simply ridiculous UK 20% sales tax on silver, whilst members of the club, the London Bullion Metal Association, pay absolutely no sales tax at all.

The Indian government’s actions should also be a stark reminder of how quickly and arbitrarily any government can raise or introduce new taxes on the precious metals to tilt the market in favour of their beloved ever-depreciating paper currencies to ensure that demand is artificially maintained for their failing system.

Link to this article: : http://www.goldmadesimplenews.com/gold/indian-government-doubles-gold-import-tax-a-warning-for-us-all-6380/

Posted by on Mar 16 2012. Filed under Analysis, Gold News, Markets. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

1 Comment for “Indian government doubles gold import tax: a warning for us all”

  1. How can you slap VAT on a currency?
    XAU/XAG is MONEY. And real money at that.

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