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English definition of “ad valorem”

ad valorem

adjective
 
 
FINANCE, TAX
an ad valorem payment, rate, or tax is calculated according to the price of a product or service, rather than at a fixed rate: Companies receive subsidies in the form of simple ad valorem payments based on the size of their export sales. We think an ad valorem tax is the best because every time the price goes up the tax goes up. Some would say that imposing an ad valorum tariff would be likely to be inflationary.
(Definition of ad valorem from the Cambridge Business English Dictionary © Cambridge University Press)
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