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Good News! Canada To Abolish Jewelry Excise Tax by 2009.
Canada has decided to spur economic growth by announcing that it's 2005 budget will account for reducing the jewelry excise tax from 10 percent to 8 percent effective immediately. The rate will be reduced by another 2 percent each March 1 beginning in 2006 until the tax is eliminated on March 1, 2009.
Jewelers in Canada have lobbied for years to abolish the tax, which has been in effect in some form since 1918. In 1996 the House of Commons Standing Committee on Finance concluded that the jewelry excise tax “unfairly discriminates against the jewelry industry, [it] is an anachronistic vestige of the early 1900s when it was introduced, and should be abolished.”
The proposed rate reductions and their effective dates:
Effective Date
February 24, 2005
March 1, 2006
March 1, 2007
March 1, 2008
March 1, 2009
Proposed Rate
8%
6%
4%
2%
0%
The Canadian Jewelers Association (CJA) stated that the tax “is the only remaining luxury tax in Canada. All other luxury taxes have been repealed.” Jewelry is the most heavily taxed consumer sector in Canada (apart from alcohol, tobacco, and gasoline.) “There is no credible policy reason for singling out the jewelry industry in this way,” CJA said.
This move by the Canadian Government will make the importation of USA diamonds and jewelry even more attractive to Canadian consumers and should result in a stronger presence of the GIA certified diamonds.
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