Task 2
Read the text and answer the questions by one of four options.Customs is an ancient concept. This institution can be traced back to the earliest known civilizations. It was in Egypt, Greece and Rome that evidence of customs activity has been found. In those days, goods were transported by ship, and taxes and duties were paid at ports and harbours. The ancient Egyptians, for example, were among the first to introduce a system of controls and taxes on imported goods. Archaeologists have found evidence of a large customs house near a port in the city of Memphis. Traders had to declare their goods upon arrival and pay a fee based on the value of the merchandise. Similarly, the Roman Empire had a complex system of customs duties. The Romans imposed taxes on various goods, including wine, olive oil, and slaves. They also required merchants to register their cargo at a customs post before entering a city or province. This allowed the authorities to monitor trade activities and collect the appropriate tariffs. During the Middle Ages, customs duties played a vital role in the economic affairs of European kingdoms. By the way, the word 'customs' comes from the Latin word consuetudo, meaning 'habit' or 'tax'. Many countries relied heavily on import and export taxes to finance their military campaigns and maintain their royal courts. The monarchs often granted special privileges to certain merchants, exempting them from certain duties or granting them exclusive trading rights. Over time, customs administrations became more formalized and centralized and the governments used customs to protect national interests. Governments still use customs duties to control trade and to protect certain industries. For example, if a country believes that another country is selling its products in the first country at a lower price than they are being sold for in the second country, it can put a countervailing duty on those products. This means that the importer has to pay the duty to the government. This increases the price of the products and makes them less competitive. This often happens when a country believes that another country is subsidizing its products, i.e. giving money to producers so that they can sell their products more cheaply. Such disputes can lead to trade wars and to increased protectionism (the practice of protecting your own industries by taxing imported goods, imposing quotas, and subsidies). Nowadays, most countries are members of the World Trade Organization (WTO) and have agreed to reduce tariffs (import taxes) and to open up their markets to foreign competition.
Questions:6. Why do governments use customs duties?