AD VALOREM DUTY. A duty levied on a commodity in proportion to the value, in contrast to a specific charge on the quantity. At first sight this form of taxation appears the more equitable one. In practice, however, customs duties ad valorem have been found to work out with great inequality, and also to be inconvenient to levy for various reasons, among which are the following : (1) the difficulty of ascertaining correctly the values of the goods charged with the duty; (2) the opening to fraud ; (3) the delay and hindrances caused to importers and others. In theory it might be supposed that ad valorem taxes on all commodities would not affect their relative values, but it has been maintained that, owing to the different proportions in which fixed and circulating capitals enter into their coat of production, this would not be so. Thus J. S. MILL remarks (Principles of Pol. Econ. bk. v. oh. iv. § 1) that in case of an ad valorem duty on all commodities exactly in proportion to their value there would be a disturbance of values owing to . . . "the different durability of the capital employed in different occupations." An ad valorem duty was levied at an early date in this country. There existed temp. Edward I. an ad valorem duty of 3d. upon every librate or twenty solidi of lead and tin (Customs .Revenue of England, Hubert Hall, vol. i. p. 66). At the present date ad valorem duties, as such, are practically unknown to the British fiscal system ; the wine duties levied differently on different classes of wine approach them (see TAXATION).