Glossary Customs Duties

Duty is a tax on an imported or exported product, and Tariff is a tax on an imported product. In a broad sense, a tariff is a tax imposed on cargo that passes a border or a domestic area. Currently, there is almost no country that levies domestic taxes, so in a narrow sense, duty refers to a border tariff or external tariff. A border tariff is divided into export duties, import duties, and transit duties. Export duties are imposed on exported products, import duties are levied on imported products, and transit duties are imposed on cargo that only passes the border. In the present day where booming export is an urgent priority, many countries are banning export duties and transit duties as they hinder exports. There are other tariffs that are classified based on various standards. For example, tariffs are classified into the following considering the purpose of imposing them: Protective tariffs for the protection of domestic industries, fiscal tariffs or retaliatory tariffs for fiscal revenue, and tariffs imposed as a result of negotiations in foreign relations, etc. Based on the standard of tariff, it is divided into ad valorem tariff, specific tariff, alternative tariff, sliding tariff, seasonal tariff, tonnage tariff, tariff quota, and combined tariff. The current duties in Korea are mainly ad valorem and levies import duties for the purpose of promoting exports and protecting domestic industries.