Fees and Tariffs
The most common type of control over the country's foreign trade through the price of goods are duties and tariffs. Oii have a huge impact on prices in international trade (on commodity markets).
The fee is a type of consumption tax levied on individuals and legal entities that enter into specific relations with the state or among themselves (for example, concluding leases , transfer of securities, custody agreements). In theory and in practice, there are a variety of types ( types ) duties :
• Exchange - the fee collected by the exchange committee from buyers of securities;
• Promissory note - the amount of money paid by the bill holder for notarizing various types of protest;
• road - fare;
• patent - the fee for granting the exclusive right to use the invention in accordance with the issued patent;
• Judicial - payment for consideration of statements of claim and cassation complaints by legal entities and citizens. There are other types of duties. We are also interested in state, foreign trade, customs, port duties, as well as some of their varieties.
The state fee - is the amount of money collected by a specially authorized institution for the commission of an action in the interests of enterprises, organizations and citizens and the issuance of documents of legal significance.
The customs duty is a tax that is levied in connection with the importation of foreign goods into the country (import duty), the export of domestic goods abroad (export duty) or when goods are transit (transit fee). Customs duty, in turn, is divided into a number of types.
Foreign trade duty - is a state tax (tax) levied on goods passed through the customs border of a given country. The fee may be established in the form of a monetary tax per unit of goods, in this case it is called a specific. The duty can also be set as a percentage of the value of the output, in this case it is called ad valorem (or value ) duty (from the Latin advalorem - according to the price, according to the estimate). Often, both the specific and ad valorem duties are simultaneously applied to the same commodity, in which case the duty is called "mixed." The specific duty is easier to establish, since it is not necessary for customs officials to determine the value with respect to which the percentage should be calculated .
The list of goods subject to foreign trade tax and customs duty rates are given in the US Customs Code.
Port Duty is the amount paid by the shipowner for the opportunity to enter the dock in some ports and harbors.
Having a modest value for industrialized countries, import duty is the main source of income for many developing countries. Due to this, the authorities have greater control over determining the volume and nature of goods crossing the country's borders and collecting taxes on them than on determining and collecting personal and corporate income taxes.
Until the Second World War, the main source of income for some countries was transit duties. But most of them were canceled during the trading rounds of the GATT/WTO even before the Doha Round ( 2001 ).
Tariff - is a system of rates of payment for various production and non-production services provided by organizations and companies to the population and various institutions, as well as wage rate systems. Types and types of tariffs are different.
Customs tariff is an instrument for regulating foreign trade, which is a list of duties levied in the given country on imported or exported goods, systematized by commodity groups (containing the names of goods, units of taxation and duty rates). Customs tariffs are subdivided into autonomous - are established by the states unilaterally; Conventional - are established by states on the basis of international agreements (they contain lower rates) and combined - combine both types of customs tariff, applying different approaches to different countries.
The tariff in the form of an income tax is most often applied to imports, however many countries exporting raw materials widely apply and export duties, affecting the cost of the goods.
Export tariff is a type of tax used for the purposes of state regulation of the supply of certain goods abroad.
One of the main problems of the economy is the tariff regime of developed countries for manufactured goods exported from developing countries that seek to diversify and increase their revenues by adding the cost of production to the cost of exporting raw materials. Raw materials often enter the markets of developed countries duty-free, but after processing the same materials are usually taxed. This makes it difficult for developing countries to seek external markets for the sale of their manufacturing products. In addition, many products that they could effectively produce are produced in industrialized countries.
Competition from developing countries leads to the formation of "pressure groups" seeking to prevent goods from these countries into the markets of developed countries. Another problem is that, although goods from developing countries fall under the preferential import regime, most successful developing countries reach the export limit, after which they lose their preferential status. So, for example, Taiwan, Singapore, Hong Kong and South Korea have had a long time preferential treatment in trade with the United States. However, in the late 1990s. this regime was abolished by the United States, since these regions greatly strengthened their trade and economic potential, and in some places their goods began to be crowded with goods of American corporations. The special regime emerged in due time as a result of the pressure of developing countries in UNCTAD. It is known as the Generalized System of Preferences ( Generalized System of Preference). This regime, subject to changes and modifications, formally operates today.
The tasks that states usually place in the field of foreign trade are not only to influence the terms of trade, but also to redistribute income, support key sectors of the national economy, improve the balance of payments, etc. As a result of export tariffs and subsidies, there is a difference between world prices and domestic prices. The direct effect of the tariff is the greater the price of imported goods compared to their cost abroad.
Export subsidy - is an additional payment to local producers for the export of goods. As a result, the price of these goods rises within the country and, accordingly, there is an incentive to expand their production. The change in prices as a result of the increase in the amount of duties and tariffs affects both the relative supply and relative demand, and accordingly the trading conditions both within the country and in the markets of other countries change.
The impact of tariffs and subsidies on world trade depends on two factors: the production capacity and the size of the country. For example, if the US introduces a 20% import tariff, then, according to some estimates, the terms of trade for this very large country can improve by 15%. This means that prices for imported goods in the US will fall by 15% compared to prices for export products. As a result of these differently directed effects from the introduction of the tariff, domestic prices will grow by only 5%. At the same time, if such a tariff is imposed by Luxembourg or Paraguay, the terms of trade there are unlikely to change significantly. But this assumption justifies imposing high duties and tariffs by some states that resort to various tricks (in order not to violate the WTO rules). In fact, the increase in duties leads to an increase in domestic prices, which affects the purchasing power of the population.
It is believed that in general tariffs and subsidies, affecting the price of goods, contribute to the development of import-substituting trends in the economy and suppress the export sector.
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