Octroi
Overview
 
Octroi is a local tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

 collected on various articles brought into a district
District
Districts are a type of administrative division, in some countries managed by a local government. They vary greatly in size, spanning entire regions or counties, several municipalities, or subdivisions of municipalities.-Austria:...

 for consumption.
Octroi taxes have a respectable antiquity, being known in Roman times as vectigalia. These vectigalia were either the portorium, a tax on the entry from or departure to the provinces (those cities which were allowed to levy the portorium shared the profits with the public treasury); the ansarium or foricarium, a duty levied at the entrance to towns; or the edulia, sale imports levied in markets.
Encyclopedia
Octroi is a local tax
Tax
To tax is to impose a financial charge or other levy upon a taxpayer by a state or the functional equivalent of a state such that failure to pay is punishable by law. Taxes are also imposed by many subnational entities...

 collected on various articles brought into a district
District
Districts are a type of administrative division, in some countries managed by a local government. They vary greatly in size, spanning entire regions or counties, several municipalities, or subdivisions of municipalities.-Austria:...

 for consumption.

Antiquity

Octroi taxes have a respectable antiquity, being known in Roman times as vectigalia. These vectigalia were either the portorium, a tax on the entry from or departure to the provinces (those cities which were allowed to levy the portorium shared the profits with the public treasury); the ansarium or foricarium, a duty levied at the entrance to towns; or the edulia, sale imports levied in markets. Vectigalia were levied on wine and certain articles of food, but it was seldom that the cities were allowed to use the whole of the profits of the taxes. Vectigalia were introduced into Gaul
Gaul
Gaul was a region of Western Europe during the Iron Age and Roman era, encompassing present day France, Luxembourg and Belgium, most of Switzerland, the western part of Northern Italy, as well as the parts of the Netherlands and Germany on the left bank of the Rhine. The Gauls were the speakers of...

 by the Romans, and remained after the invasion by the Franks
Franks
The Franks were a confederation of Germanic tribes first attested in the third century AD as living north and east of the Lower Rhine River. From the third to fifth centuries some Franks raided Roman territory while other Franks joined the Roman troops in Gaul. Only the Salian Franks formed a...

, under the name of tonlieux and coutumes.

Middle Ages

They were usually levied by the owners of seigniories. This is a tax which is levied by government for transfer of goods from one state to another state. The taxes did not remain strictly municipal, for an ordinance of Cardinal Mazarin (in 1647) ordered the proceeds of the octroi to be paid into the public treasury, and at other times the government claimed a certain percentage of the product, but this practice was finally abandoned in 1852.this as done

Tax farming

From an early time the octroi was farmed out to associations or private individuals, and so great were the abuses which arose from the system that the octroi was abolished during the French Revolution
French Revolution
The French Revolution , sometimes distinguished as the 'Great French Revolution' , was a period of radical social and political upheaval in France and Europe. The absolute monarchy that had ruled France for centuries collapsed in three years...

. But such a drastic measure meant the stoppage of all municipal activities, and in 1798 Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

 was allowed to re-establish its octroi. Other cities were allowed gradually to follow suit, and in 1809 a law was passed laying down the basis on which octrois might be established. Other laws were passed from time to time in France dealing with the octroi, especially those of 1816, 1842, 1867, 1871, 1884 and 1897. By the law of 1809 octroi duties were allowed on beverages and liquids, eatables, fuel, forage and building materials. A scale of rates was fixed, graduated according to the population, and farming out was strictly regulated. A law of 1816 enacted that an octroi could only be established at the wish of a municipal council, and that only articles destined for local consumption could be taxed. The law of 1852 abolished the 10% of the gross receipts paid to the treasury. Certain indispensable commodities were allowed to enter free, such as grain, flour, fruit, vegetables and fish.

French octroi duties were collected either by the (1) regie simple, i.e. by special officers under the direction of the mayor; (2) by the bail à ferme, i.e. farming, the contractor paying yearly a certain agreed upon sum calculated on the estimated amount; (3) the regie interesse, a variation of the preceding method, the contractor sharing the profits with the municipality when they reached a given sum; and (4) the abonnement avec la regie des contributions indirectes, under which a department of the treasury undertook to collect the duties. More than half the octrois were collected under (1), and the numbers tend to increase; (2) is steadily decreasing, while (3) has been practically abandoned; (4) tends to increase. The gross receipts in 1901 amounted to 11,132,870 francs. A law of 1897 created new sources of taxation, giving communes
Communes of France
The commune is the lowest level of administrative division in the French Republic. French communes are roughly equivalent to incorporated municipalities or villages in the United States or Gemeinden in Germany...

the option of (1) new duties on alcohol; (2) a municipal license duty on retailers of beverages; (3) a special tax on wine in bottle; (4) direct taxes on horses and carriages, clubs, billiard tables and dogs; (5) additional centimes to direct taxes.

From time to time there was agitation in France for the abolition of octroi duties, but it was never pushed very earnestly. In 1869 a commission was appointed to consider the matter, and reported in favor of their retention. Octrois were finally abolished in 1948.

In Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...

, on the other hand, they were abolished in 1860, being replaced by an increase in customs
Customs
Customs is an authority or agency in a country responsible for collecting and safeguarding customs duties and for controlling the flow of goods including animals, transports, personal effects and hazardous items in and out of a country...

 and excise
Excise
Excise tax in the United States is a indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are far from uniform throughout the United States...

 duties; and in 1903 those in Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...

 were also abolished.

Current

Octroi was still in use in the 1990s by local authorities in Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...

 for domestic goods movements. Although abolished for general trade in 1997, octroi was still being charged on certain commodities such as electricity as late as 2006.

As of 2008, octroi is levied in Ethiopia
Ethiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...

 and in only one state of India, (Maharashtra
Maharashtra
Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India...

). Maharashtra will abolish octroi soon.

Sources

  • A. Guignard, De la suppression des octrois (Paris);
  • Saint Julien and Bienaim, Histoire des droits d'octroi à Paris;
  • M. Tardit and A. Ripert, Traite des octrois municipaux (Paris, 1904);
  • L. Hourcade, Mcmuel encyclopedique des contributions indirectes et des octrois (Paris, 1905);
  • Much useful matter from some of the foregoing will be found in Report on the French Octroi System, by Consul-general Hearn (British Diplomatic and Consular Reports^ 1906);
  • The abolition of the Belgian octrois produced a voluminous official report: Abolition des octrois communaux en Belgique: documents et discussions parlementaires.
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