BUSINESS NEWS
Cutters fret over diamond bill
Posted Mon, 06 Nov 2006
Diamond cutters are concerned about the cost implications of the Diamond Export Levy Bill, and fear it could see them paying millions of rands in export levies for diamonds sent overseas for testing. Briefing Parliament's finance portfolio committee during hearings on the draft legislation on Thursday, SA Diamond Council official Brian Gutkin urged MPs to ensure the measure exempted cutters from paying levies on such stones. "There are many instances when we send diamonds overseas to be tested for authenticity and other things. This is not exporting, as the diamonds will be sent back to us once the tests have been conducted," he said. The bill is aimed at promoting the local diamond beneficiation industry by discouraging the export of uncut diamonds; it proposes a five percent levy on all rough diamond exports. The measure is likely, once promulgated, to see South Africa's biggest diamond producer, De Beers, fork out millions of rand in export levies. The diamond giant
exports almost all its locally mined stones. Notwithstanding, De Beers Consolidated Mines director Barend Petersen told the hearing his company was fully behind the bill, saying what it would pay in levies could easily be offset by the credits it stood to gain from importing diamonds. "Yes, it is true that we export a large quantity of our uncut diamonds, but most of them are brought back to the country to cater for the domestic market," he said. The SA Diamond Producers' Organisation (Sadpo) said the bill was not clear on the determination of the value of a diamond. "At the moment, we have a value determined by the state, which is 30 percent lower than the international value."
He said the industry would prefer the international value, as it was more competitive than the domestic one.
Sapa
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