Import Duty

By
rjonesx
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Import Duty

What is an ‘Import Duty ‘

Import duty is a tax collected on imports and some exports by the customs authorities of a country. It is usually based on the value of the goods that are imported. Depending on the context, import duty may also be referred to as customs duty, tariff, import tax and import tariff.

Explaining ‘Import Duty ‘

There are two distinct goals to import duties: to raise income for local government, and to give a market advantage to locally grown or produced goods that are not subject to import duties. A third related goal is sometimes to penalize a particular nation by charging high import duties on its products.

Practical Workings

In practice, import duty is levied when imported goods first enter the country. For example, in the United States, when a shipment of goods reaches the border, the owner, purchaser or a customs broker (the importer of record) must file entry documents at the port of entry and pay the estimated duties to the Customs Agency.

International Organizations

Around the world, several organizations and treaties have direct impacts on import duties. Several countries have tried to reduce duties to promote free trade. The World Trade Organization (WTO) promotes and enforces commitments that its individual member nations have made to cut tariffs. These commitments are made during complex rounds of negotiations.

Further Reading

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