Russia overturns VAT on gold and other precious metals for investment purposes. Market observers expect a surge in demand for investment gold.
Gold & Co. so far 20% VAT
No more VAT on gold and other precious metals. The project had already been announced in September 2018. Now Russian President Vladimir Putin has signed a similar amendment. So far, Russia has incurred 20 percent VAT on the purchase of investment gold and other investment metals, as well as on deposits in precious metal accounts.
Demand surge expected
By eliminating one expects on an institutional level with a surge in demand in this investment sector. According to Kitco News, the Russian newspaper Izvestia expects demand for gold and silver to rise to as much as 50 tons per year over the next five years, which is supposed to increase 15-fold. Since there is a huge difference in weight per tonne between gold and silver, the information is actually not very meaningful. The tendency is clear.
Strengthening the financial power
“Investing in gold is becoming one of the most important ways to raise funds in the treasury, as the metal is protected from the inflation of the US dollar,” Izvestia writes. In 2018, Finance Minister Alexey Moiseev said that it was also about recovering capital from abroad: “We also get statements from banks that customers are willing to buy gold for significant sums of money, billions of rubles. And the customer wants to have the opportunity to get some gold bars when he needs them. If this measure allows us to recover tens of billions of dollars of capital, then it will be justified. “