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Difficulty: MediumTrade Restrictions, Tariffs, and Customs Control

An importing nation levies a fixed tax of ₦5,000 on every metric tonne of imported cement, regardless of the shipment's total invoice price. Which type of customs tariff is being applied to these imports?

  1. Specific dutyAnswer
  2. B
    Ad valorem duty
  3. C
    Preferential tariff
  4. D
    Protective embargo

Answer

Specific duty
The correct answer identifies a specific duty because the tax is assessed as a fixed monetary amount per physical unit of measurement (metric tonne) rather than a percentage of the shipment's invoice value.

Step-by-Step Solution

1
Identify the basis of the tax assessment in the scenario.
The tax is charged as a fixed sum (₦5,000) per physical quantity (per metric tonne).
Determining whether a duty is based on physical quantity or monetary value is essential to classify the tariff type.
2
Differentiate between tariff calculation methods.
A duty charged per physical unit regardless of price is defined as a specific duty, whereas a duty calculated as a percentage of value is an ad valorem duty.
Matching the definition to the scenario confirms that the fixed physical charge represents a specific duty.

Key Concept

Classification of Customs Tariffs: Specific Duty vs. Ad Valorem Duty
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Topics

Trade Restrictions, Tariffs, and Customs Control

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