What are duties and taxes?

Customs Duty is a tariff or tax imposed on goods when transported across international borders. The purpose of Customs duty is to protect each country’s economy, residents, jobs, environment, etc., by controlling the flow of goods, especially restrictive and prohibited goods, into and out of the country.

Taxes can sometimes be confused as duty however, they are specifically taxes on the imported items. Some countries charge the sales tax from time of import along the chain of sale, from the importer to the end buyer or consumer. For example, Importer A imports 1000 dollars worth of widgets. They pay the 20% sales tax at the time of import to Customs. Importer A then sells the goods for 2000 USD and charge the end buyers the same 20% tax. Importer A will then also file a sales tax return with the government and remit the extra tax collected for the difference between what they paid at the time of import and collected at the time of sale. In other countries, the sales tax is just collected at the end point of sale.