Meaning of Customs Valuation

Customs valuation is the procedure applied to determine the value of imported goods for the purpose of levying ad valorem customs duties.
Customs duties are instruments of fiscal and trade policy.
The duties may be based on specific rates, ad valorem rates, or a combination of the two.
The objective may include and not limited to;
- Raise revenue
- Facilitate trade
- Protect domestic industry
- Encourage importation of certain products
- Collect trade statistics.

Ad Valorem Duties

Are taxes, duties or fees that vary depending on the value of products, services or property on which they are levied.
They are expressed as a percentage of the value and most of the countries apply this system e.g. 25% of CIF.
Ad valorem duty rate is not a recent invention but dates back to the middle ages and what seems to have been lacking at that time was the application of precise, standard methods of valuation.

These are duties, taxes or fees levied based on specific measures of goods such as number, weight, volume, area, capacity etc. Here, a specific sum is imposed on each article regardless of its individual value e.g. price per litre of fuel.