Market Access Map

I. General definitions

1. What Is A Tariff? Why Do We Levy Tariffs? Who Applies Customs Tariff?

Tariffs (or customs duties) are a form of tax levied by governments on the importation or exportation of goods. Although they are generally levied on imported goods, some countries levy tariffs and taxes on exported goods in some rare cases.

Tariffs are a source of revenue for governments, more important for least developed economies than for developed ones where other forms of taxes, such as income taxes or Value added taxes (VAT), prevail. Some countries levy tariffs and taxes on exports to encourage businesses to process and to ensure adequate supply of necessary goods within the country. ITC’s Market Access Map provides information on imported goods only.
2. Who Pays The Tariffs?

The importer of record pay the customs duties, which generally are levied at the time of imports. In some cases, however, tariffs may be on the exporter’s charge depending on the International Commercial Terms (Incoterm).

Figure 1: Who pays the tariffs based on the Incoterm (2010)
3. Institutional framework

The General Agreement on Tariff and Trade (GATT) is the backbone of the modern trading system. It contains the fundamental rules to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas.

The World Trade Organization (WTO) superseded the GATT as an institution on 1 January 1995. However, the GATT as an agreement is still in force and constitutes one of the WTO Agreements.
4. Type of tariffs
a. Bound tariffs

Every country maintains a tariff schedule setting forth its tariff rates for all imported goods, which are classified based on the Harmonized System (HS).

When a country joins the WTO, it submits its negotiated tariff schedule with all tariff rates on a product-by-product basis, to which it is committed toward the other WTO Members. Those tariffs are “Bound” to those rates meaning that a Member cannot increase its tariff above the bound rate without renegotiating its commitment.

The tariff schedules of developed countries are often complex with tariff treatment varying based on minor differences. Such distinction may reflect specific business interests. On the contrary, the tariff schedules of developing countries are often relatively simpler. Developing countries frequently employ a band system, with a certain level of tariff on raw materials, a higher tariff on components and semi-finished products, and the highest tariffs on finished articles.
b. Applied tariffs

A country may impose an actual duty – known as the applied tariff – that is below its bound or ‘ceiling’, rate. For instance, many developing countries have lowered their tariffs on a unilateral basis, but they still have flexibility to raise their tariffs up to the bound rate in the future if they need to protect specific domestic sectors. This practice may create uncertainty for some businesses.

Applied tariffs include MFN, general and preferential tariffs.

Note that the GATT does not impose any limit on the maximum tariff that a member may impose on imports as long as it is within the bound rate.
c. MFN tariffs
The MFN principle, set forth in Article I of the GATT, requires that “any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties”.

The MFN tariffs are therefore the customs duties imposed by a country on any WTO members without discrimination.

The MFN principle is a “cornerstone of the GATT and one of the pillars of the WTO trading system”. However, there are some exceptions (Box 1). For instance, Article XXIV permits WTO Members to form regional trade agreements (free trade areas and customs unions), in which the Members being parties to such agreements may eliminate duties on imports from each other, while maintaining duties on imports from other countries. Another notable exception is the Generalized System of Preferences (GSP) that allow developed countries to provide ‘unilateral’ tariff concessions on imports from developing countries.
Box 1 : EXCEPTIONS TO THE MFN PRINCIPLES
1. Enabling clause
  Derogations from the MFN treatment are conceded to developing countries, in respect of specific conditions, by the signatories of the GATT (i.e. Contracting Parties) Decision of 25 June 1971, relating to the establishment of "Generalized, non-reciprocal and non-discriminatory preferences beneficial to the developing countries" (BISD 18S/24) and the Decision of 28 November 1979 on "Differential and More Favourable Treatment, Reciprocity, and Fuller Participation of Developing Countries" (L/4903), also known as the "Enabling Clause”.
2. Exceptions for Regional Trade Agreements (in the framework of a customs union or free trade area) – Article XXIV GATS + Enabling clause/Article V GATS.
  GATT article XXIV allows countries that are seeking regional integration to reduce their tariffs below their MFN rates if the following conditions are met:
  
  Tariffs and other barriers to trade among the contractors of the agreement must be eliminated substantially for all products within a reasonable period of time;
  
  Regional integration must not worsen the market access conditions granted to other WTO members prior to the enforcement of the agreement.
3. General exceptions (protect human, animal or plant life or health)
  The measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, and it is not a disguised restriction on international trade) – Article XX GATT/Article XIV GATS
4. Security exceptions
  In order to protect national security interests. – Article XXI GAT/Article XIVbis GATS/Article 73 TRIPS
5. Balance-of-payments
  Right to take measure to safeguard a Member’s external financial positions. – Article XII GATT/Article XII GATS
6. Waivers
  Temporary waivers granted with the authorization of the other Members – Article IX:3 of the Marrakesh Agreement establishing the WTO
d. Preferential tariffs

Preferential tariffs are customs duties lower than the MFN tariffs, levied on imports from trading partners that have preferential arrangements (reciprocal and non-reciprocal) with the importing country.

Note that preferential rates agreed between countries may not cover all traded products. Businesses should therefore first ascertain whether a product is eligible for any preferential tariffs and then determine whether, from a cost-benefit perspective, it is better to take advantage of MFN treatment or preferential treatment. In some instances indeed, the administrative costs of gaining preferential treatment, particularly the compliance to criteria outlined in the rules of origin, outweigh the benefits of the MFN treatment that may be available under a preferential trade regime.
e. Form of tariffs

Most customs tariffs are ad valorem, which means that they are expressed as a percentage of the value of the good.

However, some duties, known as specific tariffs, are computed based on the physical quantity of the good such as weight or volume. Other forms of tariffs include a combination of ad valorem and specific duties or even more complex duties that include product-specific technicalities.

Finally, Tariff Rate Quotas (TRQ) are two-tiered tariffs. The first level of tariff (inside-quota tariff) applies to a specified quantity of import. Once this quantity limit (contingent) is reached, a relatively higher customs duty (outside-quota tariff) is levied on the imported goods. The outside tariff rate must be within the bound tariffs.

The following chart resumes the different forms of tariffs and provides typical examples.

Ad valorem rates are generally more transparent and easier to understand than specific ones. For this reason, Market Access Map computes Ad Valorem Equivalent (AVE) of specific rates and display AVEs alongside the reported tariffs.

II. Customs duties in Market Access Map

III. Aggregation methodology

Governments impose customs tariffs at the level of ‘National Tariff Lines’ (NTL), which means codes are longer than the six-digit level of the Harmonized System. At this very detailed level, comparisons across countries are not always possible as NTL codes used to define products may differ. Therefore, aggregation from the NTL to the HS6 or upper levels may be necessary.

1. Aggregation from NTLC to HS6

The aggregation technique used to obtain tariffs at the HS6 level is a simple average of all best NTL tariff rates comprised in this HS6 code.

For a given NTL, the best tariff rate or the effectively applied tariff is the minimal tariff among the MFN, the general (if applicable) and all preferential tariffs (if any).
2. Aggregation from HS6 to upper levels

Two techniques are used to aggregate tariffs from HS6 to HS4 and/or HS2: simple average or trade-weighted average.

By default, Market Access Map prioritizes the trade-weighted approach, which is expressed as following:

Market Access Map proposes three trade-weighting methods: bilateral imports, reference group imports and world imports. However, Market Access Map uses the reference group imports weights by default.
a. Trade weighting using bilateral imports

The country’s trade pattern with its partners weighs the underlying tariff rates. The bilateral weights are computed as following:

As a result, products with high import values receive a bigger weight in the aggregation. Nonetheless, this method suffers from an endogeneity bias, as the import values used in the weights may depend on the tariffs themselves. In fact, the level of tariff protection imposed on a product may influence the value imported of that product. On one hand, high tariffs may hinder imports, lowering the tariff rate’s contribution to the average tariff that is supposed to reflect the overall protection level of the product group. On the other hand, low tariffs may translate into higher imports, contributing disproportionally more to the aggregate.

Consequently, weighting the average tariffs using bilateral import values as weights may lead to a biased estimation of a country’s aggregated tariff level. Market Access Mapproposes two alternate methods to control for this endogeneity: weighting based on the reference group imports or on the world imports.
b. Trade weighting using reference group imports

This technique controls for much of the endogeneity bias resulting from a simple import-weighted averaging. The import values of a reference group are used instead of those of the country itself.

Under this method, the weight is calculated as:

By construction, the weights are identical for all countries within the same reference group.
c. Trade weighting using world imports

When tariffs are aggregated using world imports, the weights are equal for any country. Market Access Map recommends this approach when running analyses that involve cross-country comparison.

Figure 4: Aggregation Methodology in Market Access Map

IV. Ad Valorem Equivalent (AVE): Definition and Computation

1. AVE of non-ad valorem tariffs

2. AVE of Tariff-Rate Quota (TRQ)
Market Access Map displays both the TRQs reported by importing countries and their ad valorem equivalents. AVE calculation of TRQ takes into account the real volume of import, i.e. the sum of import quantities of products (at the tariff line level) subject to the TRQs from beneficiary countries.

The AVE estimates depend on the method of TRQ administration.
- The AVE is equal to the inside tariff of the TRQ if the administration method is one of the following: “Applied tariff”, “Licenses on demand”, “Auctioning”, “Historical Importer”, “ Imports undertaken by state trading entities”, or “Import undertaken by producer groups or associations”.
- For any other methods of administration, the AVE of TRQ consists of :
  - The average of the inside and outside tariff rates if the import volume is less than or equal to 80% of the quota volume.
  - The outside tariff quota if the import volume is above 80% of the contingent.
  - The outside tariff quota if the import volume is above 80% of the contingent.
3. Estimation of the Unit Value (UV)
The main challenge in the calculation of AVE is to estimate the accurate UV. In fact, UVs can be calculated for each partner separately or for a reference group:
- Global UV average: based on the sum of all (n) bilateral trade flows (i).
- Weighted UV average:
- Simple UV average: gives the same weight to all UVs.
- Median UV: based on individual bilateral UVs and uses the median UVs.
  
  The most accurate estimates of AVEs depend on the sensitivities to variations in the data. Figure 5 summarizes ITC’s approach to estimate UVs. For more detailed explanation on the methodology, please refer to the World Tariff Profile 2006, Technical Annexes A-C, pp. 179-204. Should you require any further clarification please do not hesitate to contact us at marketanalysis@intracen.org.

Type of Duty	Example	Final AVE composition
Specific tariff	$2 per kg	AVE of the specific tariff
Compound tariff	10% plus $2 per kg	Ad valorem component to which is added (or subtracted) the AVE of the specific component
Mixed tariff	30% or € 2 per kg, whichever is highest	Conditional choice (minimum or maximum) between the AVE of the specific component and the ad valorem component.
Technical tariff	9% on dairy spreads with a fat content between 39% and 60%	No AVE

Importing country	National Product Code	Product Description	Custom duty as reported
Yemen	220430000	Wine of fresh grapes, including fortified wines; grape must other than that of heading 20.90: Other grape must	Prohibited
Russian Federation	8703329093	Motor cars and other motor vehicles principally designed for the transport of persons (other than those of heading 8702), including station wagons and racing cars: Other vehicles, with compression-ignite	2.2 euro per cm³ of engine volumn
New Zealand	95081000	Roundabouts, swings, shotting galleries and other fairgound amusements; travelling cicurses and travelling menageries; travelling theatres: Travelling ciruses and travelling menageries	The rates applicable to the separate components
United States	91091010	Alarm clock movements, complete and assembled, electrically operated, with opto-electronic display only	3.9% on the movement + 5.3% on the battery

Figure 5: Unit values calculation process

V. Data availability and data collection

1. Data collection

Data in Market Access Map is collected directly from key institutions such as Ministries (Foreign Affairs, Finance and Trade), Legislative Bodies, Specialized Directions (Customs Services, Taxes Directions and Revenue Authorities), Permanent Missions to the United Nations and to the World Trade Organization, as well as Regional Institutions. Market Access Map, through its team of data collectors, is in permanent contact with these institutions thanks to National Focal Points (NFP).

NFPs regularly submit any relevant national legislations that contain information on customs tariffs and any form of internal taxes. They also send notification as soon as amendments to legislations come into force.

Market Access Map extracts customs duties from the collected official documents. The extracted content are then cleaned, formatted and compiled using advanced techniques of data manipulation and treatment in line with the state of the art methodologies for processing of international trade-related data. The later include the conformity with the Harmonized System commodity classification, the identification of duty types (ad valorem, non-ad valorem or tariff rate quota), the determination of the dutiable amount (CIF, FOB or composite value), and other requirements.

The final step before uploading the final data on the application consists of a series of verifications in order to assure the quality, the correctness and the completeness of the data.
2. Data update
Market Access Map updates tariff data once a year. However, there might be situations that require immediate update so Market Access Map team does it best to integrate those amendments. Below, we list situations that may trigger a verification and necessitate an update.
- Situation 1: New fiscal year.
  Fiscal year differs across countries. Some countries follow the calendar year to update their tariffs and taxes; such is the case of most countries. Some follow their national fiscal calendar, which is the case of Japan for example. In this situation, updates are mandatory as long as we have received the data from our NPFs.
- Situation 2: The conclusion, ratification and entry into force of a new trade agreement
- Situation 3: Changes in customs duties or national taxation from:
  - National Legislation, Official Journal, and newspapers.
  - Amendments to trade agreements, customs duties or taxes announced by countries. Customs and Tax departments regularly provide updates on taxes or customs duties.
3. Data availability

Since 1996, the Trade and Market Intelligence section of ITC is specialized in the creation and dissemination of trade-related databases. Among others, it maintains the Market Access Map database, which provides a comprehensive overview of the world’s trade protection policies.

Particularly, Market Access Map contains current and past general, MFN, and preferential tariffs applied by more than 200 countries and territories.

In addition, Market Access Map also covers other market access-related issues such as tariff rate quotas, non-tariff measures, rules of origin, and trade remedies.

In the database, tariffs are available at the most detailed national tariff line (NTL) level as well as at more aggregated level comparable across countries (HS6, HS4,HS2).

Finally, the availability of pre-calculated ad valorem equivalents of non-ad valorem tariffs allows cross country and cross product comparisons.

Please consult the Data Availability module for more details

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I. General definitions

Trade remedies are any trade policy measures that allow governments to take remedial action against imports that cause material injury to some domestic industry.

Market Access Map classifies trade remedies in four groups: anti-dumping, countervailing, safeguard and other measures. The World Trade Organization (WTO) regulates the application of anti-dumping, countervailing and safeguard measures by its Members based on three main agreements: the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (the “Anti-Dumping Agreement” - ADA), the Agreement on Subsidies and Countervailing Measures (ASCM), and the Agreement on Safeguards (ASG). Collectively, these agreements allow WTO Members to take remedial action against dumping, subsidies, and unforeseen increased imports. Nonetheless, some governments may take policy actions to rectify other trade-related situations that harm or threat to harm their domestic economy but harmful to international trade are out of the scope of the three pre-cited measures. In Market Access Map, we group them as “Other measures”. The table below summarises the different types of trade remedies.

Table 1: Type of Trade Remedy

WTO Agreement	Situation	Measure	Applying Member
Anti-dumping Agreement (ADA)	Dumping	Anti-dumping	WTO Member with domestic industry suffering injury
Agreement on Subsidies and Countervailing Measures (ASCM)	Subsidies	WTO Member with domestic industry suffering injury	Withdrawal of subsidy or removal of adverse effects WTO Member conferring subsidy
Agreement on Subsidies and Countervailing Measures (ASCM)	Subsidies	WTO Member with domestic industry suffering injury	WTO Member conferring subsidy
Agreement on Safeguards (ASG)	Unforeseen increased imports	Safeguard measures to the extent necessary to prevent or mitigate serious injury to domestic industry	WTO Member with domestic industry suffering injury

1. Anti-dumping measures

2. Countervailing measures

Subsidy occurs when governments or public bodies provide a financial contribution (Box 2) that confers a benefit on the recipient. Regardless of whether they are intended to correct market failure or to address economic and social policy issues, subsidies can distort international trade as they create a structural competitiveness imbalance into the market in favour of the subsidised imports.

Box 2: When are anti-dumping measures authorised?

1. Financial contribution by a government or a public body	Direct transfer of funds such as grants, loans, and equity infusions as well as potential transfers of funds or liabilities such as loan guarantees; Revenue due that is forgone or not collected, for example through fiscal incentives such as tax credits; The provision of goods or services (other than general infrastructure) or the purchase of goods; and Any form of income or price support in the sense of Article XVI of GATT.
2. Benefit conferred to the recipient	The financial contribution makes the recipient better off than it would otherwise have been. It is the benefit that matters, not the cost to the government
3. Causality	A causal link is required between the subsidized imports and the material injury. Examples: contraction in demand, changes in patterns of consumption, and trade-restrictive practices.
4. Respect of procedural rules	National or unilateral track Multinational track

The ASCM, which came into force on 1 January 1995, allows the importing Memberto impose countervailing measures when subsidized imports are causing harm to a domestic industry. The remedy most often consists of a duty imposed on the subsidized imports sufficient to offset the injury incurred by the subsidy, as determined by conducting a domestic investigation. The ASCM also contains the so-called multilateral track procedures to challenge prohibited and actionable subsidies. The diagram in Figure 1 summarizes the main features of each track.

Figure 1: Procedure in the application of countervailing measures

3. Safeguard Measure

4. Other Measure

Other measures include remedial actions taken by governments that are out of the scope of anti-dumping, countervailing, or safeguard measures. For example, additional duties and quotas applied by the United States in 2018 on imports of certain steel and aluminium products under Section 232 of the Trade Expansion Act of 1962 fall into this category.

II. Trade remedies in Market Access Map

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I. Introduction

Customs administrations levy various charges, taxes, and duties both on imports and exports, that increase the cost of goods and, hence, affect competitiveness.

Such customs charges may include:
1. Customs tariffs (customs duties),
2. In some cases, additional duties to remedy unfair trade practices (anti-dumping, countervailing, safeguard duties) or duties to preserve the balance of payments,
3. Other charges affecting imports (ODCs, fees for formalities).
Once goods have been subjected to the above duties and charges, they are considered imported. However, to be further cleared by customs for entry into domestic consumption, internal taxes, such as excise tax or VAT, might be collected.

Table 1: Example of customs duties, charges, taxes and fees levied by importing country

ATTENTION: For simplicity reasons, this example assumes that tax base for all taxes is CIF. In reality, it is more complicated (see Section IV, Table 2).

Figure 1: A sample of duties and charges levied at customs on goods

The taxes, listed in the Table 1, illustrate a sample of duties and charges levied at customs on goods. These duties and charges are considered indirect taxes. In this context, the distinction between direct and indirect taxes is dually important and complex to make, as it has operational implications and combines legal and economic issues. In practice, the distinction is done through the concept of tax incidence. That concept distinguishes who collects the tax from who ultimately bears the burden of a tax, and consequently whether it is a direct or an indirect tax.

Direct taxes are assessed on the basis of, and collected directly from, individual taxpayers. They could, as an example, be taxes on wages, profits, interests, rents, royalties, or all other forms of income taxes.

Indirect taxes are, in contrast, levied - through seller acting as collector - on the final consumer. Examples of indirect taxes include sales, excise, turnover, value added, franchise, stamp, transfer, inventory and equipment taxes, border taxes and all taxes other than direct taxes and import charges [1].

ITC’s Market Access Map provides information on indirect taxes only, applied on exported and imported goods.

II. Legal framework

The WTO Agreement provides scope for the application of taxes and regulations and sets disciplines which rest on two cornerstones: non-discrimination and market access. The first cornerstone is ensured through MFN and national treatment. The other, through legally-binding commitments on market access conditions coupled with safeguarding disciplines to preserve the value of these commitments, e.g. general elimination of quantitative restrictions.

With regard to internal taxes, if inappropriately designed or implemented, they could constitute de facto discrimination against imports and reduce or eliminate the value of tariff reductions. Therefore, a fundamental WTO principle – contained in the national treatment clause, codified in GATT Article III – seeks to ensure equality of competitive conditions in terms of internal taxes and other charges and regulations between imported and like domestic products.

Regarding border measures, Article II of the GATT (Schedules of Concessions) requires WTO members not to raise a duty or charge related to the importation above a ceiling level, called bound rate – listed in their schedules of concessions. Therefore, like the customs tariffs, other duties or charges (ODCs) are applied only to imported goods and are “bound” in the same schedules of concessions [2]. The difference with internal taxes is that ODCs are applied only to imported goods, while internal taxes are levied on both domestically produced and imported products.

Finally, the WTO Agreement, in accordance with GATT Article VIII (Fees and Formalities connected with Importation and Exportation), foresees one last group of customs fees. It provides that, goods at customs could be in addition subjected to fees, charges, formalities and requirements imposed by governmental authorities in connection with importation and exportation. However, if these fees are disproportionate to the cost of services rendered and increase the bound tariff level, they might violate both Article VIII and Article II of the GATT [3].

The illustrative list of fees and formalities includes [4]:

consular transactions, such as consular invoices and certificates;
quantitative restrictions;
licensing;
exchange control;
statistical services;
documents, documentation and certification;
analysis and inspection; and
quarantine, sanitation and fumigation

III. Data collection process

Data in Market Access Map is collected directly from the main institutions and specialized agencies (customs, taxes, revenue authorities). Networks of contacts with these institutions have been established also through the National Focal Points (NFPs), which regularly inform about the national legislations on customs tariffs and internal taxes in effect. Another source of information is through members’ permanent missions to the United Nations and other IOs in Geneva.

The process of data collection is in three stages. First, tax collectors find or update Market Access Map’s tax regulations on a country basis. Second, tax analysts classify taxes and code tax formulas, valuation basis, general rule, exceptions (reductions and exemptions), as well as HS products covered by general rule and all exceptions. Third and last, tax statisticians process all supporting data files and perform data quality checks.

The final step before uploading the data on the application consists of a series of verifications to ensure the quality and the completeness of the data.

IV. Classification of indirect taxes

As discussed in the previous section above, taxes are generally classified as direct and indirect. Below is a business taxonomy of indirect taxes that are those born by economic agents and levied through intermediaries as collectors (e.g. VAT). While in the case of direct taxes, they are collected directly from its payers (e.g. income tax).

Figure 2: A business taxonomy of indirect taxes that are those born by economic agents and levied through intermediaries as collectors
1. Export duties and charges
A. Export tax

An export duty, or an export tax, is a tax imposed on goods leaving customs area. Governments often use this type of tax as an export restriction tool.

Possible reasons to restrict exports could be to promote the use of locally produced goods in domestic industry, to stimulate the production and export of highly processed goods, to preserve natural resources and the environment, etc.

The WTO Agreement does not prohibit the use of export taxes, in comparison to import duties. Thus, many WTO members impose duties on exports of different commodities. For example, the Russian Federation applies export duties on many fisheries products, wood products, natural gas, Indonesia – on palm oil, Madagascar – on vanilla, coffee, pepper and cloves.
2. Import duties and charges
A. Customs tariff

Please refer to the Methodology page on Customs tariffs.
B. Trade remedies

Please refer to the Methodology page on Trade remedies.
C. Other duties and charges (ODCs)
Countries may levy other duties and charges (ODCs). These are measures, other than customs tariffs, applied only to imported goods, which do not constitute fiscal measures or fees and formalities.

For example, a stamp duty is a fee imposed by governmental authorities in connection with importation. However, if this fee is disproportionate to the cost of services rendered, it will constitute ODC.

Environmental tax might be considered either an ODC or an internal tax, depending on how it operates (if it levied on both domestically produced and imported, or only on imported goods).

Thus, it is important to read the legal document, which provides details about the coverage of the measure and its operational side. Depending on the application of the measure, it could be either fee for formalities, internal tax or ODC.

Please note, that to be legally enforced, ODCs should be listed in WTO members’ schedules of concessions and not discriminate against imports. ITC simply provides data on existing ODCs worldwide.

There is no exhaustive list of ODCs; however, they might include development taxes, surcharges, revenue duties, etc.

Examples:
- Trade development surcharge of 0.1% on imports;
- Strategic reserve levy on imports;
- Debt redemption levy on imports;
- Agriculture reform fee of 5% on imports from certain countries;
- Road maintenance and reform fee, charged as 4 USD per litre for imports of petrol and 2 USD per litre for diesel;
- The foreign exchange exit tax on imports;
- Culture and sports promotion tax of 1% on imports of products of HS chapters 21 to 98;
- The contribution to the Children's Development Fund of 0.5% imposed on imports;
- African Union levy of 0.2% on imports from non-African origins;
- ECOWAS Community levy on imports to finance the activities of ECOWAS;
- Environmental tax on imports.
3. Fees and formalities
Other than customs tariffs and internal taxes, governments may impose various fees and formalities in connection with importation (as well as exportation). The main difference is that these fees are not levied in fiscal purposes, but only cover additional administration costs.

In general, they should be commensurate with the cost of services rendered and not be levied on an ad valorem basis, as the cost of processing import transactions does not increase with the value of imports.

Official names of fees and formalities might vary in each country, however by nature they might constitute customs inspection and processing fees, storage fee, statistical levy, stamp duty, license application fee, consular invoice fee, fees for phytosanitary inspection, treatment, and quarantine, charges for verifying import invoices and certificates of origin, etc.

Examples:
- Basic stamp duty of 5 USD or 100 USD on merchandise imports, depending on the CIF value;
- Data-processing fee of 83 USD per declaration on any customs procedure;
- Statistical tax of 1% on all goods imported;
- Fees to clear customs outside of normal operating hours;
- Fees for certain licences;
- Fees for the inspection and control of agricultural products;
- Fees for customs control out of working hours and/or outside official premises at a fixed amount of 15 USD per customs officer per hour;
- Legalization fees of 50 USD for certifying import invoices and certificates of origin, and the certification fee of 20 USD for import values exceeding 20,000 USD;
- Consular fees to legalize certificates of origin, commercial invoices, packing lists, original bills of lading, airway bills, etc.
4. Internal taxes
A. General Assumption

a) The value added tax (VAT)

Value Added Tax (VAT) is a consumption tax levied on a product or service value. It is paid in stages throughout the whole supply chain, from the sale of raw materials to the final consumer’ purchase. The amount of VAT paid by consumer depends on the value of the product after deducting the cost of materials, used in the product, that have already been taxed.

VAT has a different name depending on the country in which it is charged. In some countries, it is known as a goods and services tax (GST).

Among developed countries, there is no VAT in the US.

b) Sales tax

Sales tax is a consumption tax, levied on consumers at the time of the goods’ purchase. It is calculated as a percentage of the value of the goods sold. The difference between VAT and sales tax is that the latter one is collected at the time of the final sale in the supply chain, while VAT is collected by all sellers in all stages of the supply chain.

Sales tax is valid in many countries around the world, including in the US. However, many countries have already replaced sales tax on VAT in the last few decades.

c) Turnover tax

Turnover tax is a consumption tax, based on the amount of turnover of a business enterprise, not on the profit. It is aimed to reduce the cost of compliance and administration, as sales are easier to measure, comparing to profits.

Although the majority of countries have adopted VAT tax, turnover tax is still collected by some governments. For example, in Haiti turnover tax is levied at a flat rate of 10% on turnover or the CIF value of imports.
B. Taxes on Specific Goods

a) Excise tax

Excise tax is levied by customs when importing excisable goods into the customs territory, and it is equivalent to the excise tax on domestic products. Usually, it is imposed on selected products, such as vehicles, luxury goods, alcoholic beverages and tobacco. This tax is levied separate from, and in addition to, the general consumption taxes.

For instance, Myanmar introduced an excise tax, called the Specific Goods Tax (SGT) that is levied on various types of cigarettes, beer, wine, liquor, timber and other goods.

V. Existing tax classifications

VI. Tax formula

VII. Essential tax information

1. Tax base

In general, VAT tax base consists of the customs value, to which the customs tariff and excise duty are added, if the goods are excisable. Where any other duty is payable it is also included in the value for VAT.

VAT tax base = Customs value + Customs Tariff + Excise tax + other duties and charges

For example, in Bangladesh the valuation basis for imports is the dutiable CIF value plus the corresponding amounts of import duty, regulatory duty and supplementary duty. In Mauritania, VAT on imports is calculated based on the CIF value, plus duty and, where appropriate, the statistical fee.

It would mathematically be inaccurate to sum all duties, taxes and charges and apply such total tax to the transaction value. Although the specifics might vary between different jurisdictions, it is generally on the basis of the CIF value that duties and other charges exclusively levied on imports are assessed. This value would become the tax base on which internal taxes are then levied. Therefore, an internal tax applies not only to the import value, but it additionally applies to the import duties and taxes levied.

The example below, taken from the Table 1, uses sub-totals to illustrate the different tax bases.

Table 2. Example of customs duties, charges, taxes and fees assessed by importing country, using sub-totals
2. Customs value

GATT Article VII provides methodology for determination of customs value and ensures that it is conducted in a neutral and uniform manner, precluding the use of arbitrary customs values. Although it does not regulate customs value of goods for internal taxation, the general practice is to assess it on the same basis as for customs duties.

However, some countries develop valuation methods, according to which internal taxes are charged on a different basis, which allows arbitrary assessments. Thus, valuation could increase the actual burden of tariffs.

Example: CIF value for imported goods must be pre-multiplied by coefficient 1.4 before applying the tax rate.

Therefore, MAcMap provides information on the value basis of all taxes in the database.
3. Tax reduction or exemption

The WTO Agreement provides a principle of non-discrimination in terms of internal taxes and other charges between imported and like domestic products. Therefore, some imported goods might be exempt from taxes if the sale of such goods in the country is tax-free.

Although majority of countries use some exemption categories, there is no official nomenclature, and each country defines its own categories of exemptions. There are two broad categories of exemptions: exemptions provided by international conventions or practices (goods for re-export, official use of foreign diplomatic missions, international and regional organizations, etc.) and exemptions with specific economic and social objectives (investment incentives, humanitarian aid, government purchases, medical goods, etc.) [7].

In addition, import tax exemptions or tax rate reductions can be granted through the preferential trade agreements (PTAs) or free trade agreements (FTAs). For example, in US a principal customs user fee – the Merchandise Processing Fee (MPF) – is levied on importers. However, some PTAs and FTAs provide exemptions from the MPF to the imports of countries-members to those agreements.

VIII. Tax information display in Market Access Map

Users can search for internal taxes that are applied to the products of interest in Overview and Access Taxes modules in the Market Access Map. In order to find an indirect tax rate for the product of interest, you need to identify the HS code in Product search.

1. HS nomenclature
Customs authorities generally use international nomenclature – Harmonized Commodity Description and Coding System (HS), – developed by the World Customs Organization. This nomenclature assigns various commodity groups with six-digit codes, which form the basis for customs value. HS classification is also used to determine indirect taxes’ rates.

The general practice is that governments add longer codes to the first six digits to further classify products at the level of national tariff lines (NTL). However, MAcMap implements an aggregation from the NTL to the HS6 or upper levels (HS4, HS2), which allow comparison across countries that is not possible at the level of NTL codes, varying across countries.

Please note, that using HS nomenclature to find internal taxes might sometimes be difficult, as governments often list the names of the products without reference to HS codes in the relevant legal documents.

For example, list of products subject to VAT exemptions might be the following:
- Goods for commercial use that cost less than 300 USD;
- Goods for personal use that cost less than 600 USD;
- Goods imported as gratuitous aid according to the government list
- Medical products according to the government list;
- Good imported for religious purposes;
- Cultural property imported as a gift for cultural institutions;
- Food for restaurants;
- Sophisticated machinery;
- Periodic materials imported as a gift for libraries, etc.
It should be noted, that information on indirect taxes in MAcMap is supported by the texts of legal documents (in original language and in English, if available). In case there is no specific information contained in the laws or regulations related to HS codes of the products, pre-determination of HS inclusion is applied.

Alternatively, the user can choose to search for the applicable indirect tax rate by product name in the Product search.

Literature
1. The WTO Agreement on Subsidies and Countervailing Measures, footnote 58 to Annex I.
2. Technical Annexes, A. Schedule of concessions: other duties and charges
3. Hoda A., Tariff Negotiations and renegotiations under the GATT and the WTO, Procedures and Practices, Cambridge University Press, 2018
4. The General Agreement on Tariffs and Trade (GATT) 1994
5. UNCTAD, International classification of non-tariff measures
6. The OECD Classification of Taxes and Interpretative Guide
7. Corfmat F., Goorman A., Customs Duty Relief and Exemptions, IMF
Screen 1. “Tax Information”

Screen 1. “Tax Information”
1. “International classification”: Type of tax, fee, duty or charge classified according to the ITC’s business classification.
2. “Tax Name”: Name of a tax measure given by country.
3. “Official tax name”: Tax name in local language. For example, in Russia the local tax name for VAT is "Налог на добавленную стоимость".
4. “Tax description” – Detailed information about tax measure.
5. “Applies on” – explanation whether a tax measure is applicable to import or export, or both.
6. “Institution in charge” – Institution responsible for administration of tax measure.
7. “Legislation” – law or set of laws that were passed by a government to give effect to a tax measure.
8. “Valid from – to” – Beginning and the end date of a tax measure’s application.
9. “Available file” – Link to the legal document, which provides information about tax measure.
Screen 2. “Tax Rate”

Screen 2. “Tax Rate”
1. “Tax formula” – formula used by tax authorities to calculate tax.
2. “Covered products” – list of products that are subjected to this tax.
3. “Not covered products” – list of products that are not subjected to this tax.
4. “HS code reporting” – HS classification
5. “Exceptions” – list of products that are exempted from the tax.
Screen 3. “Taxable value” (assessable tax base)

Screen 3. “Taxable value” (assessable tax base)
1. “Value basis” – total amount of values used by tax authorities to calculate tax liability
2. “Explanation” – detailed information on all components used in the calculation of tax liability

IX. Glossary

1. Value Added Tax (VAT)

VAT is an indirect tax levied at each step of a supply chain, from production to the end customer. Specifically, each participant in the supply chain pays its own VAT and is further repaid by the next participant in the chain, until the end consumer. VAT is due to be paid upon importation of goods at a rate depending on the type of imported goods. Some goods are exempt from taxation. A special procedure for calculating and refunding VAT is provided for enterprises involved in export activities.

2. Excise tax

Excise tax is an indirect tax levied on the import of excisable goods that are usually not essential items but are highly profitable. In order to calculate the amount of excise tax, it is important to know the excise rate, tax base and type of excise rate. The type of excise rate is determined by a tax legislation. There are three types of rates: ad valorem, specific or combined. At the time of exportation excise taxes are not paid, however it is necessary to confirm the right of exemption.

3. Sales tax

Sales tax is an indirect tax, equivalent to VAT, with the difference that it is levied at the final point of sale on the end consumer. It is calculated as a percentage of the value of goods and added to the specific price at the point of sale.

4. Turnover tax

Turnover tax is an indirect tax, based not on the profit, but instead on the amount of turnover of an enterprise. It is mainly aimed to reduce the cost of compliance and administration for micro businesses to meet their tax obligations.

5. Export duty

Export duty, or export tax, is a customs duty levied on goods upon their exportation. The rationale for governments to impose an export tax could be to reduce exports of sensitive products and to increase the domestic supply.

The WTO Agreement does not prohibit the use of export taxes. However, some recently acceded WTO members undertook specific commitments in their schedules to either bind or eliminate export duties (e.g. China, Russian Federation).

6. Environment tax

Environmental tax is an economic instrument introduced by governments to address environmental issues. It is designed to offset harmful effects for environment, and create economic incentives for enterprises to promote environmentally friendly activities. A tax base for environmental tax is an indicator (measured in natural or equivalent units) reflecting a proven specific negative impact on the environment. For example, emissions of pollutants into the air, wastewater discharges, production waste to be stored, etc.

7. Indirect taxes

Indirect taxes are taxes levied through seller, acting as collector, on the final consumer. Examples of indirect taxes include sales, excise, turnover, VAT, and all taxes other than direct taxes and import charges.

8. Direct taxes

Direct taxes are assessed on the basis of, and collected directly from, individual taxpayers. They could, as an example, be taxes on wages, profits, interests, rents, royalties, or all other forms of income taxes.

9. Import surcharge

Import surcharge is a temporary tax on imports, imposed in addition to ordinary customs duties.

10. Fees and Formalities

Fees and formalities are imposed in connection with importation/exportation to cover additional administration costs. In general, they should be commensurate with the cost of services rendered and not constitute fiscal measures.

11. Other duties and charges

Other duties and charges (ODCs) are border measures, imposed on the importation of goods, and which are not fiscal measures or fees for formalities. Listed in the schedules of concessions of the WTO members, ODCs should not exceed the bound level.

12. Consumption tax

Consumption tax is a tax levied when the money are spent on consumption, in contrast to the income tax which is levied when the money are earned or when interest, dividends, or capital gains from investments are received. General examples include VAT, sales tax, excise tax, etc.

13. Tax evasion

Tax evasion is any fraudulent activity committed by taxpayers deliberately providing false information in order to reduce their tax liability or illegally obtain tax benefits. For example, undervaluing imports, falsifying certificates of rules of origin, etc.

14. Tax exemption

Tax exemption is a relief from taxes or reduced tax rates. In order to be eligible for tax exemption, certain conditions should be met. For example, exporter should provide customs authorities with the rules of origin certificate stating that goods have been imported from a country benefiting from a GSP scheme.

15. Stamp tax

Stamp tax, or stamp duty, is a tax levied on legal recognition of documents related to a property or activities carried out in the destination country (e.g. import declarations and other customs documents).

16. Statistical tax

Statistical tax, or statistical levy, is a tax levied to cover the costs of accounting for the import or export of goods.

17. Tax on foreign exchange

Tax on foreign exchange is a tax levied on foreign exchange allocated for the importation of goods from abroad.

18. Customs fees

Customs fees are mandatory payments charged for performance by customs authorities of customs operations in relation to release of goods, customs escort and other acts.

19. Consular invoice fee

Consular invoice fee is a fee for the preparation and endorsement by the consul of various kinds of documentary confirmation, which are required to inform the customs authorities in some countries during import processing. Nowadays, the use of consular invoice fees has declined.

20. Port charge

Port charge, or harbour charge, is a mandatory payment levied on merchant ships arriving at the port for loading or unloading. This charge goes to the state budget and is used to improve port facilities.

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I. Introduction

II. Data source and collection methodology

III. Data availability

IV. NTM data in the Market Access Map application

V. Classification of regulatory requirements, 2012 version

1. Essential conditions are met	Dumping Injury to the domestic industry Causal link between injury and dumping
2. Must respect fundamental procedural rules	Initiation and Subsequent Investigation Evidence Provisional measures Price Undertakings Imposition and Collection of Anti-Dumping Duties Retroactivity Duration and Review of Anti-Dumping Duties and Price Undertakings Public notice and explanation of determinations Judicial review

1. Essential conditions	Unforeseen increased imports and their competitive conditions Serious injury (actual or threat): "a significant overall impairment in the position of the domestic industry" Causation and non-attribution: an affirmative causal link must be established between the serious injury and the increased imports and the injury must not be caused by other factors.
2. Must respect fundamental procedural rules	Form of measures: any forms including quantitative restrictions; Parallelism and non-discrimination: global or regional safeguards; Duration: no longer than four years; Review; Compensation; Retaliation.

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