Custom duty is example of what?

Answer 1

Definition

• A custom duty is basically a form of a tax that is charged on goods that are imported from abroad and are collected by specifically defined customs officials in points of entry. Apart from the government raising a considerable sum of money on such imports, they are also meant to protect local manufacturers from unfair competition from imports that would be slightly cheaper than locally manufactured goods. The computation of the tax is usually based on the value of the goods or any other agreed criteria.

Purpose

• Every government has a duty to protect the residents in relation to products that are allowed to enter the country. One major group that is protected is manufacturing industries whose continued stay in business assures jobs for local residents and a place from which the government will collect taxes. Consumers also need to be protected from sub-standard goods and also those goods that can be dangerous if they were to be allowed into the country. Governments therefore enforce a raft of regulations about the standard of goods that can be imported on top of the taxes that are remitted by importers.