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RAPAPORT... Over the course of the past couple of months, many theories have emerged about Belgium's pending "Carat Tax." If approved by the European Commission, this new fiscal law would tax diamond firms' turnover at 0.55 percent rather than taxing profit, as is the case now, and, so surmises local diamond leaders, create a more level financial playing field against other trading centers. Even though the tax is on every Antwerpian's mind, the proposal is rather like the Lochness Monster: nobody's seen the details, yet. However, that's about to change, too. On June 9, the Antwerp World Diamond Centre (AWDC) hosted the first seminar on the Carat Tax at the Antwerp Diamond Kring bourse. But attendance was restricted to registered diamond companies and the press was not allowed. The entire issue remains sensitive since politics has everything to do with how the Carat Tax has come to be. On the one hand, the politicians are willing to help the diamond industry, but on the other, they can't be perceived by the public as being too protective. Belgium's political equilibrium is often achieved through the maintenance of a very delicate balance between the interests of the socialists (who need money to sustain the social standards) and the liberals (who aim to support entrepreneurship). However, the Carat Tax appears to be nothing more than a major step in ensuring Antwerp's diamond firms have a fighting chance against the other diamond centers. The AWDC seminar, which was fully booked in advance, aimed to provide an overview of the law before being submitted to the European Commission. “Many things are still blurred, but the body of the law is globally defined,” said one of the attendees.
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