Taxes imposed on locally made goods are known as

Assessment: JAMB UTME - Commerce - 2025 Subject: Commerce

Question 1 Report

Taxes imposed on locally made goods are known as

 

Answer Details

Governments impose different kinds of duties depending on where goods are produced. Duties on goods brought into the country from abroad are import duties, while duties on goods sent out of the country are handled through export drawback arrangements. Neither of these applies to goods made and sold entirely within the country.

Taxes charged on goods that are manufactured locally, inside the country's own borders, are excise duties. They are collected from local producers, usually at the point of manufacture, and raise revenue while sometimes also discouraging excessive consumption of certain goods such as alcohol and tobacco.

Ad valorem duties describe how a tax is calculated, as a percentage of the value of the goods, rather than where the goods come from, so it is a method of charging, not a category tied to local production. Export drawback actually refunds duties already paid, which is the opposite of imposing a new tax.

Focus on the origin of the goods when this type of question appears: local production points to excise duties, while goods crossing the border in point to import duties.

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