What is ad valorem?
Ad volarem is a Latin term, which means “according to value.” An ad volarem tax or fee is calculated in proportion to the estimated value of the goods or transactions, just like in the case of a sales tax or value-added tax (VAT).
An ad volarem tax may also be imposed annually, as in the case of a real or personal property tax, or in connection with other significant events (ex. Inheritance tax, expatriation tax, or most relevantly, tariffs.) Some countries also impose a stamp duty as an ad volarem tax.