⑤第五讲 关税减让

Ad valorem duty
An ad valorem tariff is expressed as a fixed percentage of the value of the imported product.
At present, the taxation of most countries around the world is from AVL.
Effective protective tariff
When a country deviates from free trade and impose tariff on imported products, the percentage of an industry value-added output change constitutes effective protective tariff.
第五讲 关税减让
Tariff Concession
Introduction
Tariff concession is each member, under the auspices of WTO (or GATT), reduce tariff obligations through multilateral negoti ations and mutual concessions.
Developed countries’ tariff cuts were for the most part phased i n over five years from 1 January 1995. The result is a 40% cut in their tariffs on industrial products, from an average of 6.3% to 3.8%. The value of imported industrial products that receive duty-free treatment in developed countries will jump from 20 % to 44%.
In Chinese current taxation system, there are some tax belonging to AVL, e.g. value-added tax, sales tax, the Housing property tax.
The four types about taxable value of Chinese AVL
There will also be fewer products charged high duty rates.
Content
Basic knowledge of tariff Specific obligations related to tariff concessions The principle of tariff concession The exceptions of tariff concession principle Case study
Divided in accordance with the levied method: specific duty, ad valorem duty, mixed or compound duty, selective duty;
Divided in accordance with the level of tariff rates: general tariff and preferential tariff.
Reduce tariff generally and bound tariff rate
Bound tariff: the tariff concessions which WTO member made are bound. Bounded tariff is the rate sets forth in the schedules of concession. In addition to the exceptions of WTO rules, each member shouldn’t impose tariff exceeding the bound rate.
aggregate supply and aggregate demand
The characteristics of tariff
Mandatory Transparency Openness stability
Tariff categories
Divided in accordance with the flow of charged objects: import tariff, export tariff and transit duty;
Secondly, the AVL helps ensure revenue. Even in the case of inflation, tax revenue is expected to increase as price rises.
Tariff categories
Divided in accordance with the protection extent of specific processing section in some industries: nominal protective tariff and effective protective tariff
(the
added
value
in tariff protection-the added value the added valueade）
359 300 300
0.197
19.7%
Conclusion
If the nominal tariff rate of final good is higher, low er than (or equal with) the weighted average nominal tariff rate of intermediate goods, the effective protect ive rate is higher, lower than (or equal with) the nomin al rate of the final product.
Tariff, in contrast with domestic tax , is directly associated with the import and export taxes.
The role of tariff
Increase fiscal revenue Protect domestic industries and markets Adjust the import and export structure or the
Question
Why does GATT regard tariff as the only means to protect domestic industry?
2. Specific obligations related to tariff concessions
Implement tariff concessions on the basis of mutual benefit Impose non-discriminatory tariff Reduce tariff generally and bound tariff rate Modify the procedures and rules of binding commitments
1. Basic knowledge of tariff
The definition and effects of tariff The characteristics of tariff Tariff categories
What’s custom duties?
Tariff is the customs authorities, in accordance with domestic laws, impose a tax on imported and exported goods in the customs territory.
Actual transaction price Duty-paid value (D.P.V): CIF, FOB, Official price Composite Assessable Price Special price
The advantages of AVL
Firstly, the tax bearing of taxpayers is more equitable. When the tax rates and other conditions remain unchanged, price rising means income goes up, which lead to a corresponding increase in tax; the opposite results for the price declining.
Example
Example
Assumption: Commodity F is final good, Commodity A and B are
intermediate goods. It needs one unit A and one unit B to produce one unit F. Commodity A and B can be imported or locally
produced.
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Under the condition of Free Trade:
pF 1000, pA 500, pB 200 the added value is :1000 （500 200） 300
If the country impose 10% tax on final good F, 5% tax on commodity A, and 8% tax on commodity B.
Members can decide on the practical application of bound tariff rates.
More bindings
Developed countries increased the number of imports whose tariff rates are “bound” (committed and difficult to increase) from 78% of product lines to 99%. For developing countries, the increase was considerable: from 21% to 73%. Economies in transition from central planning increased their bindings from 73% to 98%. This all means a substantially higher degree of market security for traders and investors.
pF1 1000 0.1*1000 1100
p
1 A
500
0.05 * 500
525
pB1 200 0.08* 200 216
the added value is :1100 （525 216） 359
Effective protective rate
effective protective rate
Different from the non-tariff barriers （配额，进口许可证） , tariff is the only permitted legitimate means to protect domestic industries and markets.
Due to the high tariffs will hinder the development of internatio nal trade, therefore, tariff concession is the main goal of WTO t o eliminate trade barriers and promote trade liberalization.