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An ad valorem tax is applied at a fixed percentage of the value of the import. Therefore, if there were a two percents tax imposed against the handbags then $40 would be gained in tariff revenue on each $2000 Herme handbag and only 40 cents on the $20 Wal-mart handbag. Sometimes, a specific and ad valorem tariff is imposed on the same product at once (Saranovic, 1997-2008).
Revenue tariffs are related to government funds. An example of a revenue tariff is a product which is not made or grown in a country; however, the country creates a tariff on the specific product so the government would make money from the business importing that product...
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