Types of Tariffs
A tariff may be one of the following four kinds:

(1) Ad valorem   (2) Specific
(3) Alternative     (4) Compound

1. Ad Valorem duty - The kind most commonly used, is one that is calculated as a percentage of the value of the imported goods - for example, 10, 25 or 35 per cent.

This may be based, depending on the country, either on destination (c.i.f.), or on the value of the goods at the port in the country of origin (f.o.b.).

3. An Alternative duty
Is where both an Ad valorem duty and a Specific duty are prescribed for a product, with the requirement that the more onerous one shall be Ad valorem duty value plus 10 cents per kilo.

4. Compound duties - Are imposed on manufactured goods that contain raw materials that are themselves subject to import duty.

The "specific" part of the compound duty (called compensatory duty) is levied as protection for the local raw material industry.