What is Excise Tax ?
- Harpreet Singh
- Nov 5, 2019
- 1 min read
Excise Tax is an indirect tax that is imposed on a limited range of goods. The tax is a tax on consumption and levied on specific goods only. Excise tax is a single-phase tax, levied once at import or at the production stage within the country.
As a consumption tax, Excise Tax is ultimately borne by the final consumers, but collected earlier in the supply chain. Importers, manufacturers and in certain cases other agents in the supply chain are liable to register for Excise Tax, submit periodical returns, pay the Excise Tax due to the local authorities and maintain specific Excise Tax records.
As per Article 2 and Article 12 of the Cabinet Decision 52 of 2019, the tax shall be applicable on following Excise goods at the:
Products Rate of Excise Tax
Tobacco and tobacco products 100%
Liquids used in electronic smoking devices and tools 100%
Electronic smoking devices and tools 100%
Carbonated drinks 100%
Energy drinks 100%
Sweetened drinks 100%
Where a product meets the definition of more than one Excise Good specified in this Decision, it shall be classified as the Excise Good subject to Tax at the highest rate.
The announcement of the UAE’s intention to apply a 50% Excise Tax on Sweetened Drinks and a 100% Excise Tax on electronic smoking devices and equipment, as well as the liquids used in electronic smoking devices and equipment; the FTA have announced that the expanded Excise Tax is set to take effect on December 1st, 2019.
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