Munir Uckardes, Istanbul Precious Metals and Jewelry Exporters Union executive board member, has stated that Turkey's 20% private consumption tax (OTV) on diamonds is deterring the country's diamond sector from operating legally and is effectively preventing Turkey from becoming a regional diamond center.

Antwerp Facets Online further quotes Uckardes who said the high tax on diamonds combines with convoluted tax regulations to prevent the diamond cutting sector from operating according to Turkish law. He added that the OTV collected on diamonds impacts negatively on sales by raising the price of diamonds.



If the tax system governing the diamond sector were to be amended, Turkey could emerge as a regional diamond center. He called on the Turkish government to ensure that amendments to existing regulations be long term.



Uckardes suggested the replacement of the existing tax on diamonds with a value added tax (VAT). He noted that diamond imports to Turkey remain low due to the high tax, but there is no way to stop diamonds from entering the country illicitly.



Uckardes stated that a tax level of 4-6% would ensure that the Turkish diamond industry operated within the law. “The amount of ?TV collected thus far is no more than $4 million. But if the necessary amendments are made, the amount of KDV collected could exceed $100 million because investors will be able to compete with those in other countries.”