When most people think of tariffs, they think of the taxes placed on imported goods. However, there is a big difference between a tariff and a duty. A tariff is a tax placed on an imported good, while a duty is a tax collected by Customs on behalf of the government. Duties are generally higher than tariffs, and they are also used to regulate trade. In this blog post, we will explore the difference between these two taxes and discuss how they impact businesses and consumers. We will also look at some recent cases where duties were involved in trade disputes.
What is Duty?
Duty is a tax levied on certain goods when they are imported into a country. The amount of duty payable depends on the value of the goods, the type of goods and whether they are for personal or commercial use. Duty is also payable on some services, such as gambling and insurance. Duty is not charged on exports. Goods that are exempt from duty include medical supplies and humanitarian aid.
Duty is usually collected by Customs and Excise at the point of entry into the country. Duty tax is used to raise revenue for the government and to protect domestic industries from cheaper foreign imports. Duty rates vary depending on the type of good being imported, with some items being subject to higher rates than others. For example, alcohol and tobacco products are typically taxed at a higher rate than other goods.
What is Tariff?
A tariff tax is a tax that is imposed on imported goods and services. The purpose of a tariff is to protect domestic industries from foreign competition by making imported goods more expensive. Tariff tax can also be used as a revenue-raising measure.
- Tariffs are usually imposed by the government of the importing country and collected by its customs authorities. Tariff rates can vary depending on the type of goods being imported, the country of origin, and the country of destination.
- Tariffs can be either specific or ad valorem. A specific tariff is a tax that is levied on a particular good, such as wheat or cars. An ad valorem tariff is a tax that is levied as a percentage of the value of the good, such as 10% or 20%.
- Tariffs can also be peak or non-peak. A peak tariff is a tax that is levied at the time when imports are at their highest level, such as during a recession. A non-peak tariff is a tax that is levied at any other time. Tariffs can also be intended for different purposes, such as revenue raising, protectionism, or retaliation.
Difference between Duty and Tariff
Duty and Tariff are both taxes that are levied on imported goods. The main difference between Duty and Tariff is that Duty is a tax that is levied by the customs authority on imported goods, while Tariff is a tax that is levied by the government on all traded goods. Duty is calculated as a percentage of the value of the goods, while Tariff is calculated as a fixed amount per unit of measure.
In most countries, Duty is payable on all imported goods, except for those that are exempt from duty, such as humanitarian aid. Tariffs may also be exempt for certain goods, such as agricultural products. Duty and Tariff rates vary from country to country and are usually based on the type of goods being imported. For example, luxury items such as cars and jewelry typically have higher duty rates than basic necessities like food and clothing.
Conclusion
The difference between a duty and a tariff is important to understand because it can impact the cost of goods that you import into your country. A tariff is a tax on imported goods, while duty is a fee charged by customs officials for processing imports. Knowing the difference between these two terms can help you save money when importing products into your country.
