What term describes the type of duty rates that are based on the value of the goods?

The term that describes duty rates based on the value of the goods is "Ad Valorem." This type of duty is calculated as a percentage of the value of the imported items, meaning that the higher the value of the goods, the higher the total duty paid. For instance, if the ad valorem duty rate is set at 10% and the value of the goods is $1,000, the duty owed would be $100. This method of calculating duties aligns with the principle of proportionate taxation based on the worth of the imports.

In contrast, specific duty rates are fixed amounts that apply per unit of measure (e.g., per kilogram or per item), irrespective of the goods' value. Compound duties combine both specific and ad valorem elements, applying a fixed charge along with a percentage of the value. Fixed duties generally imply that the rate does not change based on value or quantity but is established as a flat fee. Understanding these distinctions helps clarify the unique nature of ad valorem duties in international trade and customs duties assessment.