Import duties, or tariffs, are fees charged for goods brought into a country. They are classified by purpose or calculation method, with common types including specific, protective, prohibitive, and revenue. Tariffs protect a country’s economy and market, and are collected at the border. The most common tariff is ad valorem, calculated as a percentage of the goods’ price. Other fees include green fees for poor environmental regulations and end-use fees for specific purposes.
Import duties, also called tariffs or tariffs, are money charged for goods brought into a country. There are several different types and they are classified according to their specific purpose or method of calculation. Although the types of import fees vary from country to country, there are general types that are common in many countries. The most common types of import tariffs are specific, protective, prohibitive, and revenue. Other common fees are ad valorem, green, end use, and retaliation.
These types of fees are applied to protect the general economy and consumer market of a country. Tariffs, in theory, keep the market stable and keep goods affordable. Many countries have different trade agreements to keep tariffs low or to gain a mutual advantage in trading unlike goods. In general, fees collected are no longer as large a part of total revenue for many countries as they used to be.
Import fees are generally collected when the goods being imported arrive at the border for delivery. The goods are examined and depending on what they are, the appropriate fees are collected and the goods can be delivered in the country. Customs departments generally handle these transactions and have offices at both ports and at border crossings.
Of the tariffs that are based on price, the most common is ad valorem. This fee is calculated as a specific percentage of the price of the goods. It can be tricky to implement because importers can claim goods are worth less than they are to avoid a higher tariff. The ad valorem also depends on the market price, which can fluctuate. Despite its difficulties in calculating, it is generally used more frequently than the specific import tariff, which is a fixed tariff that does not depend on the price of the imported good.
Various other import fees are based on a specific purpose. The revenue import fee is applied primarily to raise money for the government, and is generally charged for goods that cannot be produced in the importing country. A retaliatory import fee would be charged in response to another country charging an import fee. This is normally done so that the other country will remove the tariffs it is charging, or at least reduce them. The prohibitive import tariff is bound to be so high that other countries may not want to sell a good at all.
The most common type of import fee is probably the protective import fee, also known as a punitive fee. It is in place to protect a country’s domestic industry from foreign competition. Antidumping and countervailing duties are examples of this. They are designed to offset the subsidies that foreign companies receive from their governments, which keeps the domestic market viable.
Two less common fees for importation are the green fee and the end-use fee. Green fees are charged to countries with poor environmental regulations and a low standard for pollution levels. The end user import fee is charged for a specific use. If a consumer is using a good rather than an institution, they may be charged differently.
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