What is ‘Ad Valorem’ rate of duty?

An Ad Valorem rate of duty is based solely
on the value of goods that are being imported. For example, if a rate of duty on toys is
specified as 50% of the value of goods being imported, an importer would have to pay $50 as duty
for every $100 worth of toys that are imported irrespective of the number of toys being imported
or their total weight.

This is a very common method of implementing
duties as only the transaction receipts need to be examined for the amount paid for the goods
imported.

In addition to this, duties can also be calculated based
on the weight of the goods being imported, the number of items being imported, a onetime
transaction tariff or various combinations of these.