customs and excise

customs and excise. Monarchs and governments have traditionally levied customs and excise duties, but they became more important as the expense of government increased, particularly during the 17th cent. Customs duty or tariff is an impost on goods crossing a frontier, its purpose being either to raise revenue or to protect home industries. Customs duties, however, were sometimes imposed to supplement or make more effective internal excise duties. Excise, Dr Johnson's ‘hateful tax’, has traditionally been levied on a wide variety of home-produced raw materials and manufactures, notably alcoholic drinks, but also including at various times such items as coal, salt, paper, and glass.

Historically, customs and excise duties have both been objects of popular resistance. ship money, for example, was only one of several imposts introduced by Charles I which caused widespread resentment prior to the civil wars. Later, the 1707 Union of England and Scotland, though highly contentious, embodied a customs union with equalization of duty on designated items, including an enhanced malt tax, which caused riots in Scotland. With enhanced duties on wines and spirits, smuggling became widespread during the 18th and early 19th cents., partly because effective policing was impossible and partly because it was socially approved. In 1733 Walpole was nearly brought down by the Excise crisis. In the North American colonies, imposition of customs duties on such items as newspapers and Indian tea, though amounting to less than 1 per cent of average colonial income, contributed to the outbreak of war against the British.

By the late 18th cent. the customs and excise, though still stretched by smuggling and evasion, had become increasingly efficient. Adam Smith, author of The Wealth of Nations, was a commissioner of customs in Scotland, while the poet Robert Burns served as an exciseman at Dumfries. In the 19th cent., growing belief in free trade persuaded governments to reduce customs duties where possible, but increasing international competition towards the end of the century produced a call for protective tariffs which, articulated by Joseph Chamberlain, split the Conservative Party in 1903. Protectionist arguments made progress after the First World War, but one of the objects of the European Economic Community, after the Second World War, was to reduce customs duties between member states.

Ian Donnachie