revenue tariff

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A tariff imposed principally as a source of government revenue. This is contrasted with a protective tariff, imposed mainly as a means of assisting domestic producers to compete with imports. Many actual tariffs have effects in both ways, though a tariff on goods a country does not produce is clearly for revenue purposes only, while a prohibitive tariff can only be protective as it raises no revenue. Revenue tariffs are important for many less developed countries, which find difficulty in collecting taxes from a largely informal internal economy.

Subjects: Economics.

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