After countries go thru all the trouble of taxing imports, why then would they allow ppl to just buy whatever they want duty free? Why do these shops exist? What benefit do they serve? And why are they only at airports?
In: 390
What is a duty (import tax) for? When you answer this you answer your question. Duties have many purposes. In less developed countries they are a form of income and they may not offer duty free sales. But in developed countries they are a tool. They ensure competitive prices in the local economy and many other specific goals. Goods being bought and taken directly out of the local economy are not a part of the local competitive system. You can’t buy duty free and sell it there as you are leaving and would pay a duty to bring it back in.
Because these sales and consumption occur outside of the domestic market, these taxes are not useful as tools of competition and do not need to occur.
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