Excise Tax

Excises are indirect taxes imposed by tax authorities on the consumption of specific products or services, often those deemed harmful to consumers’ health and the environment or considered luxurious. These taxes are seen as an unavoidable cost of doing business and commonly apply to products such as alcohol, oil, and tobacco. Countries typically levy excise taxes to discourage consumption of these products and to generate revenue.

However, the application of excise taxes varies across different countries and can occur at various stages of the supply chain. Domestic excise duties can become “trapped” as goods and services cross borders, complicating tax management for businesses. Therefore, effectively managing excise taxes and identifying opportunities to mitigate their impact is essential for companies operating in the affected industries.