0:00How is duty calculated?
0:02There are three kinds.
0:05An ad valorem duty is a percentage of the customs value.
0:09A specific duty is a fixed amount per unit, weight or volume,
0:14regardless of price.
0:16A compound duty combines both.
0:19Here is a worked example.
0:22A shipment valued at one thousand currency units,
0:26with a fifteen percent ad valorem duty,
0:29owes one hundred and fifty in duty.
0:31If a specific duty of two units per kilogram also applies to a two hundred
0:36kilogram shipment,
0:38add a further four hundred.
0:40The total duty is five hundred and fifty,
0:43before any tax is calculated on top.
0:47Value-added tax or sales tax is usually calculated on the customs
0:52value plus the duty already charged,
0:56not on the original invoice price alone.
0:59Importers who forget to compound the two get a surprise.
1:04Work out duty first, then tax on top.