Page 31 - Bullion World Volume 3 Issue 11 November 2023

Bullion World | Volume 3 | Issue 11 | November 2023

The UAE, nestled at the world's Kong, Saudi Arabia, and Turkey. Domestic Gold Demand and Taxes
crossroads, is a key player in the These countries receive a significant The UAE has not only established
global gold market. For over a portion of the UAE's processed gold, itself as a prominent player in the
decade, it has cemented its position highlighting the global reach of the international gold trade but also
as the largest African gold customer, UAE's gold industry. as a significant consumer of the
and this trend shows no sign of precious metal. In 2022, the UAE
abating. Since 2006, the UAE has Suppliers: The Backbone of the led the Middle East in gold usage,
been actively importing millions of UAE's Gold Trade with a 38% increase in gold jewellery
dollarsworth of unrefined gold from To maintain its standing as a major demand. However, this surge was
various African states annually. player in the gold market, the UAE met with a 20% drop in demand in
relies on a network of gold suppliers. the second quarter of 2023.
One of the cornerstones of the UAE's Countries such as Mali, Zimbabwe,
success in the gold market is its Sudan, Niger, and the United One distinctive aspect of the UAE's
commitment to refining and trading. Kingdom are key contributors to gold market is its taxation policy. The
The country boasts several large gold the UAE's gold supply chain. These introduction of a value-added tax
refineries, such as Emirates Gold, nations provide the unrefined gold (VAT) in January 2018 brought a 5%
Al Etihad Gold Refinery, and SAM that is eventually processed in the VAT rate for gold and its products
Precious Metals. These refineries UAE's world-class refineries. in Dubai. This is notably the lowest
are processing immense quantities VAT rate for gold in the world. The
of gold and producing various gold One notable development in the tax applies to the entire piece of
bar sizes to cater to diverse market UAE's gold trade is its growing gold jewellery, including its value and
demands. For instance, Emirates relationship with Russia. The making charges. However, there is no
Gold processes up to a staggering UAE's largest exporter of gold, VAT on 24-carat gold in the form of
200 tons of gold each year. Temis Luxury Middle East, has bars, and items with 99% gold purity,
seen substantial shipments. This which are tradable in international
The UAE is not only an importer but flourishing partnership underscores markets. Moreover, VAT is imposed
also a significant exporter of gold. the diversification of the UAE's gold on the service of making a jewellery
Its top destinations for gold exports imports. item if a separate fee for the service is
include Switzerland, India, Hong identified and charged by the jeweller.

Libya: The Gold Reserves of Northern Africa

Topic Key Points

Gold Reserves - Libya has Africa's third-largest gold reserves (117 metric tons), valued over $6 billion.

Gold Exports - Libya exports over $230 million of gold, mainly to the UAE and Turkey.

Gold Mines in Libya - Gold mines are found in the Tibesti Mountains and the Kouri Bougoudi district on the Libyan border.

- Libya has laws regulating gold mining, including joint venture requirements and sector-enabling
Mining Regulations
laws.

In stark contrast to the UAE's role as a major gold importer and consumer, Libya possesses significant gold reserves.
Africa's third-largest holder of gold reserves, Libya's estimated 117 metric tons of gold is valued at over $6 billion at
current prices. This places Libya's gold reserves among the top 25 globally, according to International Monetary Fund
(IMF) data.

31