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Tax vs. Duty: Know the Difference

Shumaila Saeed
By Shumaila Saeed || Published on January 20, 2024
Tax is a mandatory financial charge imposed by a government on income, property, or sales. Duty is a government-imposed tax on imports or exports of goods.
Tax vs. Duty

Key Differences

Tax refers to a compulsory financial contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions. Duty, on the other hand, is a kind of tax, often associated with customs, imposed on the import and export of goods.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024
Tax is a broader term that encompasses various types of mandatory payments to the government, including income tax, sales tax, and property tax. Duty specifically refers to taxes on imported and exported goods, like tariffs and excise duties, aiming to regulate trade and revenue.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024
While taxes can be direct or indirect and are charged on a wide range of economic activities and properties, duties are primarily indirect taxes and are only levied on specific goods during international trade.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024
The primary purpose of tax is to fund public services and government operations. In contrast, duty is often used as an economic tool to control cross-border trade activities and protect domestic industries.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024
Tax rates can vary based on income levels, property values, or consumption, whereas duty rates are typically determined by the type of goods and their country of origin.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024
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Comparison Chart

Definition

Levied on income, property, and purchases.
Imposed on imports and exports.
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Shumaila Saeed
Jan 20, 2024

Type

Direct and indirect.
Primarily indirect.
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Shumaila Saeed
Jan 20, 2024

Purpose

To fund government and public services.
To regulate trade and protect domestic industries.
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Shumaila Saeed
Jan 20, 2024

Application

Broad, applies to various economic activities.
Specific to goods in international trade.
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Shumaila Saeed
Jan 20, 2024

Variation

Based on economic factors like income or value.
Based on goods type and origin country.
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Jan 20, 2024
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Tax and Duty Definitions

Tax

A tax on sales or on the receipts from sales.
The total cost included a 10% sales tax.
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Shumaila Saeed
Jan 05, 2024

Duty

A tax on the manufacture of certain goods.
Excise duty on alcohol affects its retail price.
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Shumaila Saeed
Jan 05, 2024

Tax

A tax on corporate profits.
The company's corporate tax liabilities grew last year.
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Jan 05, 2024

Duty

A tax on exported goods.
Export duty on raw materials was waived to boost trade.
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Shumaila Saeed
Jan 05, 2024

Tax

A tax on specific goods, like alcohol and tobacco.
Excise tax on cigarettes discourages smoking.
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Jan 05, 2024
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Duty

A tax on cross-border trade.
Customs duty is levied on all electronics imported.
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Shumaila Saeed
Jan 05, 2024

Tax

A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.
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Shumaila Saeed
Jan 05, 2024

Duty

A duty on specific imported goods.
A new tariff was imposed on imported steel.
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Shumaila Saeed
Jan 05, 2024

Tax

A fee or dues levied on the members of an organization to meet its expenses.
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Shumaila Saeed
Jan 05, 2024

Duty

An act or a course of action that is required of one by position, social custom, law, or religion
The duties of being a critical care nurse.
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Shumaila Saeed
Jan 05, 2024

Tax

A burdensome or excessive demand; a strain.
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Shumaila Saeed
Jan 05, 2024

Duty

Required action or service
Jury duty.
Beyond the call of duty.
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Shumaila Saeed
Jan 05, 2024

Tax

To place a tax on (income, property, or goods).
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Shumaila Saeed
Jan 05, 2024

Duty

Active military service
A tour of duty.
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Shumaila Saeed
Jan 05, 2024

Tax

To exact a tax from
Taxed the people.
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Shumaila Saeed
Jan 05, 2024

Duty

Moral or legal obligation
It is your duty to tell the truth.
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Shumaila Saeed
Jan 05, 2024

Tax

(Law) To assess (court costs, for example).
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Shumaila Saeed
Jan 05, 2024

Duty

The compulsion felt to meet such obligation
Acting out of duty.
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Shumaila Saeed
Jan 05, 2024

Tax

To make difficult or excessive demands upon
A boss who taxed everyone's patience.
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Shumaila Saeed
Jan 05, 2024

Duty

A tax charged by a government, especially on imports.
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Shumaila Saeed
Jan 05, 2024

Tax

To accuse; confront
Taxed him with ingratitude.
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Shumaila Saeed
Jan 05, 2024

Duty

The application of something for a purpose; use
The dining room table also does duty as a desk.
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Shumaila Saeed
Jan 05, 2024

Tax

To hold accountable
The contractor was taxed with the mistake of the subcontractor.
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Shumaila Saeed
Jan 05, 2024

Duty

A measure of efficiency expressed as the amount of work done per unit of energy used.
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Shumaila Saeed
Jan 05, 2024

Tax

Money paid to the government other than for transaction-specific goods and services.
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Shumaila Saeed
Jan 05, 2024

Duty

The total volume of water required to irrigate a given area in order to cultivate a specific crop until harvest.
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Shumaila Saeed
Jan 05, 2024

Tax

A burdensome demand.
A heavy tax on time or health
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Shumaila Saeed
Jan 05, 2024

Duty

That which one is morally or legally obligated to do.
We don't have a duty to keep you here.
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Shumaila Saeed
Jan 05, 2024

Tax

A task exacted from one who is under control; a contribution or service, the rendering of which is imposed upon a subject.
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Shumaila Saeed
Jan 05, 2024

Duty

The state of being at work and responsible for or doing a particular task.
I’m on duty from 6 pm to 6 am.
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Shumaila Saeed
Jan 05, 2024

Tax

(obsolete) charge; censure
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Shumaila Saeed
Jan 05, 2024

Duty

A tax placed on imports or exports; a tariff.
Customs duty; excise duty
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Shumaila Saeed
Jan 05, 2024

Tax

(transitive) To impose and collect a tax from (a person or company).
Some think to tax the wealthy is the fairest.
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Shumaila Saeed
Jan 05, 2024

Duty

(obsolete) One's due, something one is owed; a debt or fee.
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Shumaila Saeed
Jan 05, 2024

Tax

(transitive) To impose and collect a tax on (something).
Some think to tax wealth is destructive of a private sector.
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Shumaila Saeed
Jan 05, 2024

Duty

(obsolete) Respect; reverence; regard; act of respect; homage.
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Shumaila Saeed
Jan 05, 2024

Tax

(transitive) To make excessive demands on.
Do not tax my patience.
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Shumaila Saeed
Jan 05, 2024

Duty

The efficiency of an engine, especially a steam pumping engine, as measured by work done by a certain quantity of fuel; usually, the number of pounds of water lifted one foot by one bushel of coal (94 lbs. old standard), or by 1 cwt. (112 lbs., England, or 100 lbs., United States).
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Shumaila Saeed
Jan 05, 2024

Tax

(transitive) To accuse.
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Shumaila Saeed
Jan 05, 2024

Duty

That which is due; payment.
When thou receivest money for thy labor or ware, thou receivest thy duty.
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Shumaila Saeed
Jan 05, 2024

Tax

(transitive) To examine accounts in order to allow or disallow items.
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Shumaila Saeed
Jan 05, 2024

Duty

That which a person is bound by moral obligation to do, or refrain from doing; that which one ought to do; service morally obligatory.
Forgetting his duty toward God, his sovereign lord, and his country.
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Shumaila Saeed
Jan 05, 2024

Tax

A charge, especially a pecuniary burden which is imposed by authority.
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Shumaila Saeed
Jan 05, 2024

Duty

Hence, any assigned service or business; as, the duties of a policeman, or a soldier; to be on duty.
With records sweet of duties done.
To employ him on the hardest and most imperative duty.
Duty is a graver term than obligation. A duty hardly exists to do trivial things; but there may be an obligation to do them.
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Shumaila Saeed
Jan 05, 2024

Tax

A charge or burden laid upon persons or property for the support of a government.
A farmer of taxes is, of all creditors, proverbially the most rapacious.
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Shumaila Saeed
Jan 05, 2024

Duty

Specifically, obedience or submission due to parents and superiors.
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Shumaila Saeed
Jan 05, 2024

Tax

A task exacted from one who is under control; a contribution or service, the rendering of which is imposed upon a subject.
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Shumaila Saeed
Jan 05, 2024

Duty

Respect; reverence; regard; act of respect; homage.
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Shumaila Saeed
Jan 05, 2024

Tax

Especially, the sum laid upon specific things, as upon polls, lands, houses, income, etc.; as, a land tax; a window tax; a tax on carriages, and the like.
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Jan 05, 2024

Duty

The efficiency of an engine, especially a steam pumping engine, as measured by work done by a certain quantity of fuel; usually, the number of pounds of water lifted one foot by one bushel of coal (94 lbs. old standard), or by 1 cwt. (112 lbs., England, or 100 lbs., United States).
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Shumaila Saeed
Jan 05, 2024

Tax

A disagreeable or burdensome duty or charge; as, a heavy tax on time or health.
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Shumaila Saeed
Jan 05, 2024

Duty

Tax, toll, impost, or customs; excise; any sum of money required by government to be paid on the importation, exportation, or consumption of goods.
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Shumaila Saeed
Jan 05, 2024

Tax

A sum imposed or levied upon the members of a society to defray its expenses.
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Jan 05, 2024

Duty

Work that you are obliged to perform for moral or legal reasons;
The duties of the job
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Shumaila Saeed
Jan 05, 2024

Tax

Charge; censure.
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Shumaila Saeed
Jan 05, 2024

Duty

The social force that binds you to your obligations and the courses of action demanded by that force;
We must instill a sense of duty in our children
Every right implies a responsibility; every opportunity, an obligation; every possession, a duty
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Shumaila Saeed
Jan 05, 2024

Tax

A lesson to be learned; a task.
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Shumaila Saeed
Jan 05, 2024

Duty

A government tax on imports or exports;
They signed a treaty to lower duties on trade between their countries
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Shumaila Saeed
Jan 05, 2024

Tax

To subject to the payment of a tax or taxes; to impose a tax upon; to lay a burden upon; especially, to exact money from for the support of government.
We are more heavily taxed by our idleness, pride, and folly than we are taxed by government.
Shumaila Saeed
Shumaila Saeed
Jan 05, 2024

Duty

A tax on imported goods.
The import duty on luxury cars was increased.
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Shumaila Saeed
Jan 05, 2024

Tax

To assess, fix, or determine judicially, the amount of; as, to tax the cost of an action in court.
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Shumaila Saeed
Jan 05, 2024

Tax

To charge; to accuse; also, to censure; - often followed by with, rarely by of before an indirect object; as, to tax a man with pride.
I tax you, you elements, with unkindness.
Men's virtues I have commended as freely as I have taxed their crimes.
Fear not now that men should tax thine honor.
Shumaila Saeed
Shumaila Saeed
Jan 05, 2024

Tax

Charge against a citizen's person or property or activity for the support of government
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Shumaila Saeed
Jan 05, 2024

Tax

Levy a tax on;
The State taxes alcohol heavily
Clothing is not taxed in our state
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Shumaila Saeed
Jan 05, 2024

Tax

Set or determine the amount of (a payment such as a fine)
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Shumaila Saeed
Jan 05, 2024

Tax

Use to the limit;
You are taxing my patience
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Shumaila Saeed
Jan 05, 2024

Tax

Make a charge against or accuse;
They taxed him failure to appear in court
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Shumaila Saeed
Jan 05, 2024

Tax

A tax on personal earnings.
He paid a higher income tax due to his increased salary.
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Shumaila Saeed
Jan 05, 2024

Tax

A tax based on property value.
Their property tax increased after the home renovation.
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Shumaila Saeed
Jan 05, 2024

Repeatedly Asked Queries

What is a duty?

A tax, often a customs tax, on imported or exported goods.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024

How does tax differ from duty?

Tax is a broad term for government-imposed charges, while duty specifically refers to import and export taxes.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024

Do duties affect product prices?

Yes, they can increase the cost of imported goods.
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Shumaila Saeed
Jan 20, 2024

Who pays taxes?

Individuals, businesses, and organizations pay taxes on income, property, or purchases.
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Shumaila Saeed
Jan 20, 2024

Are taxes voluntary?

No, taxes are mandatory payments.
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Shumaila Saeed
Jan 20, 2024

Is sales tax a form of duty?

No, it's a form of tax on domestic transactions.
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Shumaila Saeed
Jan 20, 2024

How are tax rates determined?

By government policies, often based on income or value.
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Shumaila Saeed
Jan 20, 2024

What's an example of a duty?

Import duty on cars or electronic goods.
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Shumaila Saeed
Jan 20, 2024

What is a tax?

A compulsory financial charge imposed by the government.
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Shumaila Saeed
Jan 20, 2024

Who pays duties?

Importers and exporters pay duties on goods crossing borders.
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Shumaila Saeed
Jan 20, 2024

Can duty rates change?

Yes, depending on trade policies and international relations.
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Shumaila Saeed
Jan 20, 2024

Is income tax the same in all countries?

No, it varies by country and individual income.
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Shumaila Saeed
Jan 20, 2024

Is VAT a tax or a duty?

VAT (Value Added Tax) is a form of tax.
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Shumaila Saeed
Jan 20, 2024

Are tax laws the same worldwide?

No, they vary significantly across countries.
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Shumaila Saeed
Jan 20, 2024

Can I avoid paying taxes?

Legally, no. Tax evasion is a punishable offense.
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Shumaila Saeed
Jan 20, 2024

Is excise duty different from customs duty?

Yes, excise is for specific goods, while customs is for imported/exported goods.
Shumaila Saeed
Shumaila Saeed
Jan 20, 2024

What is customs duty?

A tax on goods imported into a country.
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Shumaila Saeed
Jan 20, 2024

Does duty help local industries?

Yes, by making imported goods more expensive.
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Shumaila Saeed
Jan 20, 2024

Are duties applicable on all goods?

Not all, it depends on the type of good and trade agreements.
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Shumaila Saeed
Jan 20, 2024

Why are taxes important?

They fund public services and government operations.
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Shumaila Saeed
Jan 20, 2024

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About Author
Shumaila Saeed
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Shumaila Saeed
Shumaila Saeed, an expert content creator with 6 years of experience, specializes in distilling complex topics into easily digestible comparisons, shining a light on the nuances that both inform and educate readers with clarity and accuracy.

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