China is set to revamp the levies placed on diamonds traded on the Shanghai Diamond Exchange in a move which could boost trade.

The authorities are understood to be preparing to change the current value-added tax (VAT), scaling it down from 17 per cent to four per cent, Jewellery Net Asia reports.

If approved the change is expected to provide a major boost for the jewellery trade in the area, with platinum one of the potential beneficiaries as it used used extensively as the setting material for diamonds.

The move is designed to boost trade and raise the exchange's profile, but also to target the black-market gems currently available, with smuggling becoming an issue in recent years.

Shanghai has been trading diamonds since 2001, offering members duty-free imports.

A report in Chinese media recently predicted the domestic jewellery market would flourish in the coming years, tipping it to grow by as much as 40 per cent in five years.

Gold, diamond and platinum sales are expected to reach $25 billion in China by 2010, according to the Gems and Jewelry Trade Association.


Ÿ Adfero Ltd