Customs Administration

Abstract

Taxes on international trade have traditionally been a substantial source of fiscal revenues for the majority of countries. Goods that crossed national borders were easily identified, goods were held until duties and taxes were paid — so tax evasion was somewhat difficult — and duty rates were often specific so that the issue of valuation was mostly avoided. Hence, from a tax administration point of view, customs duties were much easier to collect than alternative sources of revenue, while their relative security and predictability were welcome from a broader fiscal management standpoint. Economic arguments also favored taxes on international trade. Export taxes were levied on the assumption that they were paid by foreign buyers rather than domestic suppliers and so spared residents from the burden of the tax. Import duties were seen as a tool for industrialization as they protected local producers from import competition, thereby creating a local constituency of both business owners and workers in their favor.