What is Import Tariff

admin — Fri, 20 Nov 2009 20:06:27 +0000

Tariffs are a form of tax levied on goods imported into the country. They may be charged at an absolute amount or as a percentage of the total price. Tariffs are one of the oldest forms of taxation, in use well before more modern forms of tax such as income or corporation tax. They were particularly popular with governments in the 17th and 18th centuries when the mercantilist doctrine was dominant in economic thought. Mercantilism held that money flowing out of the country was bad, and money flowing into the country was good. Naturally, according to this interpretation, importing goods was a bad thing, because it caused money to flow out of the country. Since tariffs make imported goods relatively more expensive to domestic consumers, they were widely favoured.

In modern times, the use of tariffs is quite rare. A web of international agreements has meant that trade between nations is far freer than it was before. When tariffs are imposed, it is almost never for the purpose of raising revenue per se, but because the tariff-imposing nation feels that the other country has acted unfairly in some way in its economic policies, perhaps, for example, by subsidising the industry which is producing the imported goods, meaning that it is not subject to normal economic restraints.

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What is Import Tariff