EXCISE

 

Excise tax is a duty on the manufactured goods assessable at the moment of manufacture. The duties are often associated with customs duties levied on pre-existing goods when they cross a designated border in a specific direction. It is a tax imposed on the goods for the production, licensing and sale. An excise is a per unit tax, costing a specific amount for a volume or unit of the item purchased.

It is applied to a narrow range of products. An excise is typically heavier, accounting for a higher fraction of the retail price of the targeted products. Excise taxes are taxes on gasoline and other fuels and taxes on tobacco and alcohol. Excise was introduced in the mid 17^th century. Excise is typically directed towards categories of harm.

Health risk – Taxes on tobacco and alcohol which harms the risk. It is known as sumptuary tax.

Environmental damage – taxes on the fossil fuels such as petrol, diesel which harms the environment. It is known as green tax.   

Social damage- taxes on gambling and can include prostitution where it is legal. It is known as vice tax or sin tax. Monies raised through excise for redress of specific social costs commonly associated with the product or service on which it is levied.

An Excise duty is often applied by the affixation of revenue stamps to the products being sold.