Friday, 18 January 2013
Customs Duty - where did it come from?
We seem to take it for granted that if we want to bring goods into our country from a supplier based in another country that the our government can claim a tax based on the cost of that purchase. But why? I will examining the background to customs charges in a series of blogs, but first, let's go back to the beginning.
"Customs", as a word, originally comes from the Latin consuescere, a compound verb formed from the prefix com- and suescere meaning "become accustomed". This passed into early Old French as costudne which developed via costumne to custome.
The word "duty" comes from Anglo-Norman (13th Century) dueté which was a derivative of Old French deu or "owed" (which, in itself gives us the English word "due") which was turned into débitus in Latin. From débitus we get the English words debt and debit. When it is linked to the tax owed to the crown or government for importing goods (or occasionally exporting) rather than sourcing them locally we end up with the definition meaning it is a customary tax due.
In England, customs duties were typically part of the customary revenue of the king, and therefore did not need parliamentary consent to be levied, unlike excise duty, land tax, or other forms of taxes. This, of course, made them a very popular source of income for the royal family.
The amount of tax due is published in a tariff. The word tariff appears to have originated from the Arabic ta?rifah, derivative of ?arrafa "to make known". Around 1591/2, via the Latinised tariffa or "arithmetical table" or "list of prices", it came to mean "an official list of customs duties on imports or exports".
The First Tariff
It appears that the first customs tariff was set out in Palmyra in AD136 and outlined different tax rates for different commodities being imported via Palmyra for the Roman Empire. Palmyra, a beautiful oasis city in the Syrian desert, was given the role of collecting municipal customs duties by the Roman emperor Hadrianus. The tariff was engraved on a stone pillar in both Greek and Aramaic - my particular favourite is "for salted goods carried by donkey, the person in charge of the customs farm shall collect three denarii per load at importation and exportation". Trade was state-controlled as it was considered a very important economic activity so, despite the tariff charges, imports were to be encouraged and exemptions from duties could be considered by the supervisor or frontier officer of the "customs farm". A temporary duty was often collected from caravans thought to be eligible for this exemption - giving us another word "a cess" (tax paid prior to assessing the correct amount) which we still see in some countries' tariff structure - before they were sent on to the chief inspector at the customs house to have the correct duty amount calculated and their entry documents officially stamped.
Unlike many taxes, customs duties were easy to collect and difficult to avoid. Though they were never popular, they did not lead to some of the disasters associated with other taxes. Customs duties have been one of the most reliable sources of public revenue for many centuries.
Posted by S+H LLP at 13:20