Ad Valorem Duty

An Ad Valorem Duty is a tax imposed on goods based on their overall value, rather than a fixed fee per item. For example, if you import a product worth $1,000 and the duty rate is 10%, you pay $100 in import taxes. This system ensures the tax amount correlates with the worth of the goods, making it fairer for higher or lower value items. Ad Valorem Duties help governments generate revenue and protect local industries by adjusting taxes according to the value of imported goods.