One of the roles of Customs Administration is the collection taxes on imports or exports. A big portion of such taxes are computed as a percentage of Customs Value. Customs value can be subjective due to a number of dynamics around it. This, therefore made it necessary to have an international Agreement on Customs Valuation.
The full title of WTO Valuation Agreement is “Agreement on Implementation of Article VII GATT 1994” WCO Valuation Compendium provides further material to facilitate the application of the Agreement.
Value may be defined as… worth, desirability; purchasing power; equivalent of a thing … which may be substituted or exchanged for a thing The essential ingredients which give a “good” or “thing” its value is desire; need; choice; access and means. The value of a thing is reflected by its acquisition, that is, its purchase by way of a sale, lease/hire, loan, swap or, barter.
The term “customs value” also reflects that “worth” by the physical movement of goods from one country to another. The importer or exporter makes “Customs value” declaration to the Customs administration. Customs value determinations (decisions) provide the basis on which Customs duties/taxes are calculate.
01:02 Objectives/Learning Outcomes
1) Define key terms and concepts used in Customs Valuation
2) Explain the history of Customs Valuation
3) Outline the objectives and general principles of the agreement