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What is a tariff?
Generally speaking, a tariff is a tax or fee applied by a government to collect revenue. The term is commonly
used to refer to a tax on imported goods.
Tariffs have been applied by countries for centuries and have been one of the most common methods used
to collect revenue for governments. Largely this is because it is relatively simple to place Customs officials
at the border of a country and collect a fee on goods that enter. Administratively, a tariff is probably one of
the easiest taxes to collect.
Import tariff is one of the main tools that Customs uses to collect revenue. Customs imposes tariffs on imported goods as a percentage of the determined Customs value. Import tariff is also used widely to protect
domestic industry. The ACD implements tariff policy which is not only oriented on revenue collection, but
which also supports consumers and producers in Afghanistan.
How are tariffs levied?
There are two basic ways in which tariffs may be levied: specific tariffs and ad valorem tariffs.
A specific tariff is levied as a fixed charge per unit of imports. For example, let’s say the government levies
a 1Af specific tariff on every wristwatch imported into Afghanistan. Thus, if one thousand watches are imported, the Afghan government collects 1000Afs in tariff revenue. In this case, 1000 Afs is collected whether
the watch is a 2000Af Swatch or a 200,000Af Rolex.
An ad valorem tariff is levied as a fixed percentage of the value of the commodity imported. Ad valorem
is Latin for “on value” or “in proportion to the value.” Let’s assume, for example, that the government of
Afghanistan levies a 2.5 percent ad valorem tariff on imported automobiles. Thus, if 100,000Afs worth of
automobiles are imported, the government collects 2,500Afs in tariff revenue. In this case, 2,500Afs is collected whether two 50,000 Afs cars or ten 10,000 Afs cars are imported.
Occasionally, both a specific and an ad valorem tariff are levied on the same product simultaneously. This
is known as a combined tariff. For example, wristwatches imported into Afghanistan face the 1Af specific
tariff as well as a 6.25 percent ad valorem tariff on the case and the strap and a 5.3 percent ad valorem
tariff on the battery.
Produced by the Afghan Customs Department
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Most countries have a tariff schedule that specifies the tariff collected on every particular tariff schedule
which is revised approximately every five years.
Under this system, all goods imported must be classified in order to have duties and taxes assessed. Tariff
classification enables governments to identify goods imported into the country for purposes of duty and tax
collection, as well as gathering statistical information for economic planning, trade negotiation, and the enforcement of national and international laws.
A global “Harmonized System” for the description and classification of goods was created in 1988 (revised
in 2007), and soon after adopted by nations around the world. The broad, core specifics and structure of
Harmonized System classifications is universal to all countries on the six digit level, with each participating
country eligible to add and define specific detail items, and to create and assign rates of duty in any required
categories for all classifications.
In Afghanistan, the commodity classifications are based on the international Harmonized Commodity Coding and Classification System (or the Harmonized System) established by the World Customs Organization.
A new, revised classification will be produced by the WCO in 2012. That information will be available on the
ACD Web site (http://Customs.mof.gov.af/) when it becomes available.
In 1389, a new tariff book was introduced by the ACD. The number of tariff lines in the Tariff Schedule of Afghanistan is now 5218 (including 46 lines of prohibited goods).
Table 1: Comparison of Tariff Schedules
Number of Tariff Lines
Y1389 Q1
Y1389 Q2
Y1389 Q3
Y1389 Q4
Y1390 Q1
Y1390 Q2
5168
5168
5168
5168
5171
5172
Number of Tariff Lines with actual trade
2304
2266
2377
2352
2548
2313
Number of Tariff Bands
11
11
12
12
14
15
Simple Average Tariff
5.4%
5.5%
5.7%
5.8%
5.9%
6.0%
Agricultural Products
4.5%
5.3%
5.8%
7.1%
7.1%
7.1%
Industrial and other products
5.6%
5.7%
5.6%
5.8%
5.8%
5.8%
Weighted Average Tariff
5.8%
6.8%
7.2%
7.3%
8.0%
7.5%
Agricultural Products
5.2%
5.6%
6.7%
6.7%
7.8%
6.3%
Industrial and other products
5.7%
6.4%
7.3%
7.3%
8.2%
7.7%
Including:
Including:
You can access the Afghan tariff online by clicking here or by visiting the ACD Web site at http://Customs.mof.
gov.af/en/page/1035.
Produced by the Afghan Customs Department