Import Duties and Tariffs

[LeoN88]

Just a quick question to any of you in the know as i've tried to find some info but there isn't much about it..

First of why do we have to pay import duties?
Where does the money go?
Is it a set price on the value of the goods?

What are tariffs?

If anyone can help me out on this it would be appreciated

 

[[TW]Fox]

First of why do we have to pay import duties?

Import duties are a largely protectionist measure. They are designed to increase the competitiveness of domestically produced products in order to protect the economy of the home country by artificially increasing the price of imported products.

Where does the money go?

To the treasury.

Is it a set price on the value of the goods?

No, it is a percentage based on the product.

 

[Energize]

Just a quick question to any of you in the know as i've tried to find some info but there isn't much about it..

First of why do we have to pay import duties?
Where does the money go?
Is it a set price on the value of the goods?

We have to pay duty simply because the government wants to rape us for more money.

 

[LeoN88]

Cheers for that Fox

 

[[TW]Fox]

We have to pay duty simply because the government wants to rape us for more money.

Obviously I am wrong, and the economical rationale for tariffs is of course this

 

[ivrytwr3]

got stiffed with £23 customs charge for a Disney toy from the US

 

[anything I don't mind]

Just a quick question to any of you in the know as i've tried to find some info but there isn't much about it..

First of why do we have to pay import duties?
Where does the money go?
Is it a set price on the value of the goods?

What are tariffs?

If anyone can help me out on this it would be appreciated

We have import duties because it is another way for the state to make money, they are greedy and try to think of new ways to take money from the population everyday. They say that it is too force people to buy locally. But realy the consumer just loses out because we end up paying more than we could if we could just order it from another country. As most of the government policies it has the appearance of helping the consumer but realy it only helps the government make more money.

The money goes in to the government black hole as far as i am aware.

 

[LeoN88]

Didnt realise this was going to be a big debate it was just an area which needed a brief explanation on and i wished to include in my uni assignment but knew nothing about. Where exactly does the money from the treasury from import duties get invested? Or does it generally get spent throughout the whole of the country?

Are we one of the few countries to enforce this along with perhaps oz, the US etc? As there wouldnt be much point in more deprived countries would it as it would surely have a negative effect on it?

So is a tariff the same thing as an import duty?

 

[Sp00n]

Import Duty is worked out on a tariff based on what the item actually is.

 

[mattyfez]

I bought some car audio equipment from Canada, about 120hz quids worth, got a FedEx tax bill for about 20 quid a fee weeks later.

Didn't pay it, never got any more letters apart from the first one

 

[Sp00n]

120hz you say?

I bought 2 t-shirts from threadless and was charged more import duty than that

 

[Pawnless Endgame]

Customs tax kicks in at £18, or £36 if it's marked as a gift. It's normally charged at VAT rate, which is now 20% but the courier often slaps an admin fee on top. The thing that makes customs tax highly unfair is that the shipping cost is also accounted for, and taxed.

 

[Energize]

Obviously I am wrong, and the economical rationale for tariffs is of course this

Given that tax is charged on products not available in this country, it doesn't seem to be about protecting the economy really.

 

[PhillyDee]

Customs tax kicks in at £18, or £36 if it's marked as a gift. It's normally charged at VAT rate, which is now 20% but the courier often slaps an admin fee on top. The thing that makes customs tax highly unfair is that the shipping cost is also accounted for, and taxed.

And then charged AGAIN by Parcelfarce (Their £18 charge).

 

[oweneades]

Import duties are a largely protectionist measure. They are designed to increase the competitiveness of domestically produced products in order to protect the economy of the home country by artificially increasing the price of imported products.



To the treasury.



No, it is a percentage based on the product.

In basic terms this. In reality (especially the last point) it is extremely complicated (I have been part of a team that over the last 15 months has implemented a Customs Warehouse import/export system into our company so know first hand the complexities) - OPR was especially interesting and still doesn't work properly.

To pad out what Fox has stated above, you (from a companies perspective) will pay import duties (and possibly Anti Dumping duties) depending on what the product is, what it cost (including Freight, Tooling & Mould) and where it come from.

For importation into the UK, Tariff codes are used to define what a product is based upon certain characteristics (this is far too complicated to explain easily) but as an example a toy car will have a different tariff code to a type of shoe (there are over 200 codes for shoes alone). As a general rule of thumb the tariff code and origin will determine the amount of duty payable at the point of import (the point at which a Supplementary Decelaration of import is made to the CHIEF system).


In the UK (for impotation puposes) we use a 10 digit tariff code which is derived from the EU wide 8 digit Combined Nomenculture (CN). The CN code has itself been derived from the 6 digit HSE (Hamonized system of Export) codes used by the World Customs Organisation.

Things start to get very complicated when you start to delve deeper into the tariff itself. This is before we start talking about the TIS to EDI spec...

Anyway I have rambled enough here.

 

[[TW]Fox]

Given that tax is charged on products not available in this country, it doesn't seem to be about protecting the economy really.

It is - but it the tax system would be ridiculously complicated if it went down to specific product level. So it doesn't.

It is, for example, charged on 'cars' not 'cars except the 2010 Mustang which they dont sell here'.

We have import duties because it is another way for the state to make money, they are greedy and try to think of new ways to take money from the population everyday. They say that it is too force people to buy locally. But realy the consumer just loses out because we end up paying more than we could if we could just order it from another country. As most of the government policies it has the appearance of helping the consumer but realy it only helps the government make more money.

It's main purpose is to protect the economy - tariffs have been used for many years and are used across the world. It gets even more specific for some places - where import X from Country Y attracts tariff A, but from Country W where there is a trade agreement, it attracts tariff B, etc etc.

It's there for good reason - if there were zero tariffs then there would be nothing to stop Country B flooding Country A's market with ultra-cheap products, perhaps even below cost, in order to at best bankrupt various competiting companies or at worst cripple a countries home grown industry.

But feel free to just say 'omg its teh government being teh nastys' if it's easier for you to understand.

 

[Lopéz]

It is - but it the tax system would be ridiculously complicated if it went down to specific product level. So it doesn't.

It is, for example, charged on 'cars' not 'cars except the 2010 Mustang which they dont sell here'.



It's main purpose is to protect the economy - tariffs have been used for many years and are used across the world. It gets even more specific for some places - where import X from Country Y attracts tariff A, but from Country W where there is a trade agreement, it attracts tariff B, etc etc.

It's there for good reason - if there were zero tariffs then there would be nothing to stop Country B flooding Country A's market with ultra-cheap products, perhaps even below cost, in order to at best bankrupt various competiting companies or at worst cripple a countries home grown industry.

But feel free to just say 'omg its teh government being teh nastys' if it's easier for you to understand.

Indeed - I can never fathom why people like Energize cannot understand this.

 

[Pav89]

Globalisation has meant that we live in a world where products can be shipped from anywhere we want, very easily.

It all goes back to Mercantilism. The classical theory of Mercantilism which dates back to the 16th C when land was still being discovered, tried to increase trade between countries by exporting more than importing, so that more money was going into their own economy. Imperialism was fueled by $$ which meant capturing more land = more resources = less importing and more exporting.

So it all derives on protecting the economy of a country. If we could buy something cheaper from somewhere else, we would. Take product A. You can buy it in the UK, but can buy it cheaper in France. If product A is manufactured in the UK and in France, then people would be made redundant if product A is being bought in France by a load of UK people.

Keeping unemployment levels low requires the government to intervene and to add tariffs to restrict buying outside of the home country. Tariffs also help to develop the economy. Take Nissan for example...the plant in Sunderland has brought jobs, and now Nissan aren't facing large costs for the importing the Juke to the UK. Intra-industry co-operation with other firms that are not direct competitors but aid Nissan spring up with more employment opportunities arising, all this because of indirect effects of tariffs.

I could go on and on...but you get the gist (hopefully)

 

[Energize]

Indeed - I can never fathom why people like Energize cannot understand this.

I understand the logic behind taxing products sold in the UK (not that I agree with it), but some categories of products like artwork prints are inherently not available in the UK and should be exempt from tax for these reasons, so there's no reason to tax everything. Luckily by the same virtue it is easy to evade tax on these products because the product is not identifiable.

 

[Pav89]

I understand the logic behind taxing products sold in the UK (not that I agree with it), but some categories of products like artwork prints are inherently not available in the UK and should be exempt from tax for these reasons, so there's no reason to tax everything. Luckily by the same virtue it is easy to evade tax on these products because the product is not identifiable.

Import tariffs and value added tax are totally different things