Description

Levies are charges that are imposed on imports of particular products and that raise the world market prices of those products to the prices on the domestic market. Levies are not customs duties, although they are imposed by the customs authorities on import. The level of the levy corresponds to the difference between the world market price and the desired domestic market price.

Levies are sometimes linked to import quotas and graduated. In this case, a certain percentage of the quota attracts a low levy while all imports above this level attract the full levy. Levies require extremely intensive observation of both the domestic and the world market and a clear idea of the desired domestic market price.

Variable levies are not WTO-compliant.

Requirements

• A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
• Clear and coherent political strategy and targets for policy-makers and public authorities
• Close cooperation and knowledge sharing with research institutions
• Compatible regional and world trade law (WTO conformity)
• Constant market surveying and forecasting
• Efficient customs administration
• Market price information systems

Possible Negative Effects

• Inefficient structures and enterprises are retained / market distortion
• Higher prices for consumers and higher costs for processors
• Prices of complementary products could rise
• Risk of undesirable effects