Excise Rates2 min read

Role of Excise

The term “excise” generally refers to a tax levied on certain goods produced domestically or imported, often on items considered non-essential or harmful to public health. The role of excise can vary depending on the country and its specific tax policies. Here are some common aspects of the role of excise:

1. Revenue Generation:

   – One primary role of excise is to generate revenue for the government. By imposing taxes on specific goods, governments can raise funds to support public services and infrastructure.

2. Control and Regulation:

   – Excise taxes are often used as a regulatory tool to control the consumption of certain goods, such as tobacco, alcohol, and environmentally harmful products. Higher excise taxes can lead to reduced consumption.

3. Public Health Considerations:

   – Excise taxes are commonly applied to products that pose health risks, like tobacco and alcohol. The higher taxes aim to discourage consumption and address public health concerns associated with these products.

4. Environmental Conservation:

   – Excise taxes may be applied to products that have a negative impact on the environment, such as petroleum-based fuels. This can encourage the use of alternative, more environmentally friendly options.

5. Trade Policy:

   – In some cases, excise taxes are used as part of trade policies to protect domestic industries. They can be applied to imported goods to make them more expensive compared to domestically produced alternatives.

6. Social and Economic Objectives:

   – Excise taxes can be aligned with broader social and economic objectives. For example, they may be used to address income inequality, promote sustainable practices, or support specific industries.

7. Source of Government Intervention:

   – Governments may use excise taxes to intervene in markets and influence consumer behavior. By adjusting tax rates, authorities can shape the supply and demand for certain goods.

It’s important to note that the specific goods subject to excise taxes and the rates applied can vary widely between countries. Additionally, the role and impact of excise may evolve based on changes in government policies, societal attitudes, and economic considerations.

Importance of Excise

Excise in the UAE

Excise Rates

  • Carbonated Drinks (excluding Sparkling Water) – 50%
  •  Sweetened Drinks – 50%
  •  Energy Drinks – 100%
  •  Tobacco Products – 100%
  •  E-cigarettes, Liquids & Tools – 100%