Customs tax calculation

Customs tax

Customs duties or customs tariff, which are taxes imposed on goods that are imported by others. Tariffs are used by many countries to protect their industry from foreign competition. A tariff provides protection by raising the price of imported goods. Thus, tariffs encourage domestic firms to increase their production, and consumers are forced to pay higher prices if they want imported goods. Tariffs on exports are sometimes used in some countries to increase government revenues, and a country may use tariffs to influence or protest the economic or political policies of some other countries.

Countries set the amount of tariff in different ways. Some may have trade agreements that include a clause providing for preferential treatment for certain countries, under which they impose the lowest normal tariff rates in their country on all signatory countries. Special preferential tariffs can be imposed, usually lower than the general preferential tariff, to encourage imports from less developed countries. Countries that form a customs union remove tariffs from trade between them, and may also have a common tariff that covers trade with non-members of the customs union. The common market has the same tariff policy as the customs union, but provides greater cooperation among members. As for the countries of the free trade area, they impose a tariff on trade between them, but each country can impose the tariff it wants on non-members.