Customs Duties

Customs Duties, tolls or imposts levied by a government on merchandise imported into or exported from the country. The name originated during the 17th century struggle for supremacy between the English monarch and Parliament; the monarch asserted that ancient custom gave the Crown the right to levy duties on trade.

Customs duties in modern times are fiscal devices instituted essentially for reasons of economic policy rather than as revenue-raising measures. Import taxes, the more usual form of customs duties, are levied primarily to favour domestic manufacturing and agricultural industries against foreign competition by raising the selling prices of imported articles. Import quotas are established for the same reason. Export taxes are imposed on raw materials, chiefly in agrarian countries, to maintain prices and control distribution of the available supply. For the same reason export quotas are instituted in both industrially developed and agrarian countries. A schedule of customs duties is called a tariff. Tariffs are not at present the target of anticompetitiveness measures conceived under the auspices of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO).