Customs

Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods (like animals) and hazardous items in and out of a country.

Functions of Customs

1. Prevention of smuggling.
2. Collection of revenue (duties).
3. Appraisement of cargo.
4. Maintenance of statistical data required for construction balance of trade.
5. Enforcement of quotas.
6. Control of bonded warehouses (where dutiable goods are kept until duty on them is paid).

Types of Duties Levied

1. Export duty levied on locally produced goods for export.
2. Import duty levied on goods imported.
3. Excise duty imposed on locally produced goods for home consumption.

Basis of Calculation of the Duties

1. Ad valorem duty: A certain percentage of price is added.
2. Specific duty: A fixed sum of dutiable good is taxed.

Free trade zone

• It is an area, normally close to port, where prevailing taxes on international trade are not applicable.
• This zone is used for:
  1. Blending.
  2. Packing.
  3. Sub-Assembly.
  4. And for reexporting without payment of duties.

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