What Are The Difference Between Tariff And Non Tariffs

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Tariffs and Non Tariffs Ghana tariff structure is simple; it is comprised of three major rate categories: 1) a low rate of 0 percent 2) a moderate rate of 10 percent applied to primarily to raw materials and intermediate inputs, and also consumer goods 3) a higher rate of 25 percent on final consumer goods. In addition, “there are a numerous programs under which imports can be exempted from import duties and manufacturer can apply for permission to import raw materials and intermediate inputs at concessionary duty rates” (Barjracharya & Flatters, 2015). Tariff and non-tariff effect global financing operations by having an impact on whether countries will build and invest in companies in the home country. If an organization wants to build…show more content…
“The tariff also helps protect jobs in the industry that has eliminated the foreign competition but a negative impact is felt because it causes the consumer to pay more for a product that is imported” (Hill, 2004). If a country it prone to levy tariffs on items that an organization may need, it would increase the risk of doing business while located in that company. By having a country manufacture or produce product that can be done for less elsewhere is not a wise utilization of resources and in turn harms global trade. Tariff is a tax applied to an import and is one of the oldest trade policies in effect. This tax is generally revenue for the host country’s government. There are two types of tariffs; specific tariff and ad valorem tariff (Hill, 2004). “A specific tariff applies a set tax to a certain import. If a specific tax of fifty cents were applied to wine then the government would gain 50 cents from every bottle coming into the United States without regard to the price of the wine. An ad valorem tax is applied at a fixed percentage of the value of…show more content…
One of the examples of Non-tariff trade barrier is domestic content requirement. Domestic content requirement not only protect the local industries, it also helps the supporting industries to prosper and gain a larger market share. Non-tariff barriers are restrictions imposed upon countries such as voluntary export restrictions, antidumping and subsidies, quotas (Hill, 2004). Voluntary export restrictions (VER) is when a country limits the number of product being exported to a certain country in order to gain favor or to diffuse a situation in which trade tensions are running high. A second type of barrier is a quota. Quota is another form of tariffs where the government restricts the quantity of goods that can be imported into the country. “It is usually combine with the use of import taxes, whenever a firm imports a certain goods and it exceed the quota amount, higher tax will be imposed on the remaining goods” (Hill, 2004). Global financing can be an uncertain endeavor. Tariff can make it very hard to accurately judge whether or not to approve a risky venture. A financing institution must take a thorough look at all sides of the puzzle. In general, organizations engaging in international finance activities can experience much greater uncertainty in their revenues. An unsteady and unpredictable stream of revenue can make it hard to operate a business
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