Which tax is applied to goods that are leaving a country?

An export tariff is a tax imposed on goods that are leaving a country. The primary purpose of this tax is to generate revenue for the government and potentially to manage the amount of certain goods being exported. By taxing exports, a government can make domestic goods more affordable for local consumers, possibly discouraging over-exportation of certain commodities that may be vital for the local economy or can influence the global market price of those goods.

Export tariffs can also serve strategic purposes, such as encouraging domestic industries by making exports less profitable in the international market, which may prompt businesses to focus more on meeting local demand. Thus, applying a tax on outgoing goods aligns with a government’s policy tool for managing trade dynamics and economic strategies abroad.

The other options do not correspond to the tax specifically levied on exported goods. A compound tariff typically refers to a tariff that combines both a specific and an ad valorem rate, rather than directly impacting exports. An absolute quota sets a physical limit on the number of goods that can be exported, but it does not function as a tax. Similarly, a tariff rate quota allows a set amount of goods to be imported at a lower tariff rate before a higher tariff applies, which pertains to imports rather than exports.