We have known, really since the beginning of time, that India has a healthy gold smuggling crime racket.
Now we learn that Japan, too, has gold smuggling operations and they are on the rise in light of rising taxes. If these governments would stop stealing everything from the people and leave them enough to live on, the gold smugglers would dry up and go away. But, idiot government officials will remain idiot government officials and continue pushing for more and more taxes creating a larger and larger black market for gold.
Gold is on the rise everywhere but western developed economies. The eastern economies are acquiring gold, literally, by hook or by crook.
Another potential bonanza for organized crime unless loopholes closed
TOKYO — As Japan prepares to raise the consumption tax for the first time in half a decade next year, the Ministry of Finance worries that gold smuggling will also get a boost.
When the tax was last increased in 2014, to 8% from 5%, smuggling of the precious metal jumped as criminal organizations quickly realized how to game the system for their own enrichment.
The scheme works like this:
Procure gold in places like Hong Kong, which does not tax it.
Have mules hide it in their luggage and blend in with tourists, traveling to Japan to sell to stores that buy gold from the public.
The stores pay for both the gold itself and the consumption tax.
The tax component becomes pure profit.
And with the consumption tax set to rise to 10% in October 2019, margins will grow even fatter.
Japan has an unflattering reputation as a 'go-to place' for gold smugglers. In 2017, there were 1,347 cases discovered by law enforcement - 112 times the tally from 2013, the year before the last tax hike.
Seized gold last year amounted to 6,236 kg, a 47-fold increase.
“It looks like the break-even point for smugglers is between 5 and 8%,” a government source said of the sudden spike.
Will this trend continue? Will the smugglers stop having their wares stolen by the authorities? Are they going to come up with better ways to get the gold into Japan? Losing 6,236 kilos of gold is a lot of gold, a massive amount of fiat down the drain.
Are the Japanese citizens reading the “tea leaves” regarding the BRI and other eastern economic alliances’ and the potential impact on currencies in the not too distant future? Westerners do not begin hoarding gold, acquiring gold and even recognizing that gold exist because the government raises taxes or there is some type of monetary change. No, westerners simply roll over and proclaim – “thank you, sir, may I have another?”