What is the difference between duties and tariffs

A duty refers to the specific amount of money paid as per the pre-determined tariff rates decided by a government.

In both cases, the taxes are levied by the government and the income generated goes to the government. The rate at which duty and tariff taxes are charged varies from country to country. Countries that impose the highest tariffs include The Bahamas At the other end of the spectrum, these are the most recently recorded average import duty weighted rates for the major economic zones calculated in :.

As a result of these changes, the average import duty in the U. Although tariff and duty rates vary across the world, free trade agreements have served to make it easier to manage and control international trade by applying fixed and agreed values. Next Story ». Select From Over , Industrial Suppliers. Share sensitive information only on official, secure websites. However, there are fees and other requirements that apply to the type of importation and business.

There is, however, a state sales tax of 5. Thus, taxes on consumption levied to the end-user will vary from 5. There are fourteen US territories and possessions:. Different tariffs applied on different products by different countries. National sales and local taxes, and in some instances customs fees, are often charged in addition to the tariff. The tariff, along with the other assessments, is collected at the time of customs clearance in the foreign port.

Tariffs and taxes increase the cost of your product to the foreign buyer and may affect your competitiveness in the market. So knowing the final cost to your buyer can help you price your product for that market.

In addition, your buyer may ask you to quote an estimate of these costs before making the purchase. This estimate can be made via email, phone, or in the pro forma invoice. Both Duties vs Tariff are popular choices in the market; let us discuss some of the major differences. So from the above study, it is clear that Duty vs Tariff is the form of taxes and use interchangeably. A tariff is a form of duty or tax imposed on goods and services when they transport from one customer area to another whereas duties are the collected amount from tariff taxes.

Both are levied on goods and financial transactions. Both Duty vs Tariff act as tools to control international trade and encourage production within the home country.

The government imposes duties and tariffs to increase the revenue of the government in terms of tax collection. In short tariffs and duties are restrictions used to control foreign products entering the domestic market of the country. With the effect of tariffs and duties, the consumer surplus goes down whereas producer surplus increases due to an increase in prices of the product. In India, both are administrated by the department of revenue which works under the control of the Ministry of Finance.

This has been a guide to the top difference between Duty vs Tariff. Here we also discuss the Duty vs Tariff key differences with infographics and comparison table. You may also have a look at the following articles to learn more. Submit Next Question. By signing up, you agree to our Terms of Use and Privacy Policy.