Imbaby: Gold Shops Provide Buying and Selling Services… No Such Thing as a "Resale Tax"

Saeed Imbaby, CEO of the “iSagha” platform, explained that gold shops provide citizens with buying and selling services, which cannot be offered free of charge.

He noted that a jeweler earns revenue from sales through a portion of the craftsmanship fee after deducting the factory charge. When buying gold from consumers, the jeweler typically deducts an average of 2%, which may rise or fall depending on market conditions and volatility. In some cases, this percentage is applied as a form of hedging against price fluctuations.

Imbaby added that gold shops face high monthly operating expenses, including rent, electricity bills, security costs, taxes, and risks related to gold purity differences. Therefore, they cannot provide buyback services without compensation.

He stressed that all markets operate with a two-price system for gold: one price for selling and another for buying. This also applies to retail jewelers dealing with wholesale traders of raw gold, where real profit margins remain limited and are only realized in rare cases when the metal is held for a period before being resold.

Meanwhile, the General Division for Gold and Jewelry issued an official statement in response to recent rumors about the existence of a so-called “gold resale tax.” The division confirmed that no law or official decree imposes such a tax and that reports of rates ranging between 1% and 3% are false.

The statement clarified that gold pricing functions similarly to currency exchange in banks, where there is a buy price and a sell price, and the difference between them represents the jeweler’s profit margin for providing the service. Prices also change hourly in line with global market movements and the U.S. dollar exchange rate locally.

It further explained that what is deducted when buying used gold is not a tax but a “hedging margin” determined by the jeweler according to market conditions. This margin covers the risks of price fluctuations and the costs of melting and remanufacturing old jewelry.

The division emphasized that this margin is not fixed and varies from one jeweler to another. It tends to rise during periods of sharp volatility and decline during stable conditions.

It also stressed that there is no such thing as a gold resale tax, and that any deduction beyond the buy-sell price spread or the hedging margin set by the jeweler has no legal basis.

The division added that resale transactions are subject to supply-and-demand dynamics, which allow consumers to evaluate offers freely. It urged consumers to compare prices among multiple jewelers and to carefully verify weight and purity before selling, to ensure their rights.

Finally, it called on jewelers to maintain accuracy and transparency with clients, and to train their staff to perform calculations correctly, reiterating that “there is no tax without a legal text,” and stressing that transparency is key to building trust and maintaining market stability.