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?
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For the large part:
Many countries will waive some parts of the normal taxes on goods if they are immediately exported after purchasing. This often can make domestic goods more competitive on the market for departing international travelers
Many countries will also give a personal allowance exemption on certain/all imported goods, allowing some quantity to be brought home without import tax.
Also, it provides one last chance for the airport to hope to gain some additional profit from last minute gift purchases. International travel tends to draw a lot of more wealthy business and leisure travelers, the kind of shopper who could more likely consider purchasing luxury goods on impulse.
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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Here is a great article that covers the creation of duty free shopping:
[https://www.npr.org/transcripts/610518433](https://www.npr.org/transcripts/610518433)
It started in Ireland. It was kind of a way to increase commerce. The podcast 99 percent invisible did an episode (and article) on the first duty free shop. Check it out!
Tourist discount. You came here, you must’ve spent money here, buy what you can carry without tariffs before you leave. Maybe your friends will want to buy cheap alcohol and foreign cigarettes on a trip also.
Because they couldn’t agree who takes the profit so they prefer to just lose it than any of them having it.
Yes, i know, its hard to belive
>After countries go thru all the trouble of taxing imports, why then would they allow ppl to just buy whatever they want duty free?
Basically all import tariffs have an exception for small amounts of stuff that travelers carry for personal use. It’s so the customs officers don’t waste time collecting 83¢ in import duties on tourists’ souvenirs, or investigating whether the cigarettes you have in your pocket came from this or that country, and whether they’ve been taxed correctly. It’s only a minor exaggeration to say, anything less than a truckload isn’t worth getting out of your chair over.
I’ve never fully understood duty free shopping when traveling internationally. Like let’s say I’m going to Jamaica for a few days. Should I buy duty free at the U.S. airport and then take the slightly cheaper booze or whatever with me to my hotel in Jamaica to save money on drinks while I’m on vacation?
Or should I buy slightly cheaper booze on the Jamaica side on the way home to save a few bucks on some rum that I now have to cart through the airport(s) and taxi and all that?
I mean I get saving a few bucks, but the prices didn’t seem THAT much better when I looked at it. And you’re limited on # of bottles and such anyway so it’s not going to really impact your bottom line at the end of the day if you managed to save like $5 total on 2 bottles of rum.
If you are traveling to a place where things like alcohol or cigs are very highly taxed, it may make sense to buy it. Otherwise, nothing in those shops is close to the market price in the U.S.. Also a last chance to get a souvenir if convenience is worth the price.
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