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What are tariffs? and How to calculate it?

 Customs duties are taxes imposed by States on goods imported or exported from abroad and paid during the transit of such goods and their entry into or departure from the taxable customs territory.

Taxable customs territory means the ground part, including ports, floating flats and installations located in territorial waters of all national territory, except for free zones to which all or some national customs laws do not apply and which are exempt from the performance of such duties.

Most exports are currently exempt from performing any tariffs except rare, mainly for raw materials and natural resources. According to the World Trade Organization, more than 10% of world trade in these goods is subject to export taxes.

What are tariffs? and How to calculate it?

Basis of calculation:

Customs duties for imports are calculated on the basis of the commercial value of the imported goods after the addition of both freight and transportation expenses until they enter the taxable customs territory and the cost of insurance for these goods.

The commercial value of imported goods is often determined by invoices made by importers as one of the documents attached to the Customs Declaration unless the Customs Administration finds fraud in these invoices with the intention of tax evasion by authorizing prices below real prices.

In this case, the customs administration has the right to reassess the goods from prices sold in the country of origin (in which they were manufactured), or by reference to invoices previously submitted by other importers that charge the same goods provided they are manufactured in the same country of origin.

Customs duties are either in the form of percentages of the value of the imported goods or in the form of lump-sum amounts for each unit of measurement of the imported quantity (kg, l, m...).

Imad Protectionism:

Customs duties have historically been the most important pillar of any protectionist trade policy through which the State aims to protect national production from competition for foreign goods. Duties on the import of goods for entry into State borders increase their cost, and thus also their sale prices, thereby enhancing the price competitiveness of national products for goods coming into the country from beyond borders.

Tariffs also benefit the State through the provision of significant tax revenues, allowing for increased public spending and financing of its development projects.

However, while these fees serve the interests of local producers and the State, they directly affect consumers' purchasing power and reduce their chances of consumption, which has a negative impact on the well-being and standard of living of society.

National companies' sense of permanent protection from the State - In the absence of genuine and stimulating internal competition, it is discouraged to exert effort and money to attract competencies, invest in research and development and encourage creativity capable of creating innovations and improving quality, thereby leaving it idle and working as before, so that the consumer becomes the biggest loser in this situation, not getting quality or saving money on himself.

Peasant exception:

However, peasant products were an exception to that trend, and developing countries suffered very high tariffs on their peasant exports from developed countries.

The Doha Round of world trade negotiations launched in 2001 had failed to liberalize trade in such products, owing to the intransigent attitude of Western countries that did not want to make a serious effort to reduce tariffs and eliminate non-tax barriers to developing countries' peasant exports.

The United States and the European Union wanted to continue exporting both aircraft and beef, making some peasant developing countries (Argentina as a model) wonder whether advanced economies kept them on the international trade map.


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