Excise

Excise is a term used in the field of taxation to refer to a type of tax that is levied on specific goods or services, such as alcohol, tobacco, and gambling. It is often included in the price paid by the consumer and passed on to the government by the producer or retailer.

Overview

An excise, or excise tax, is a type of tax that is levied on specific goods or services rather than on general income or property. Excise taxes are often included in the price paid by the consumer and passed on to the government by the producer or retailer. They are typically levied on goods and services that are considered harmful or linked to health issues, such as alcohol, tobacco, and gambling.

History

The concept of excise taxes dates back to ancient times, when they were used as a form of revenue for the state. In modern times, excise taxes have been used as a tool for social policy, to discourage consumption of certain goods or services, or to raise revenue for specific purposes.

Types of Excise Taxes

There are two main types of excise taxes: ad valorem and specific. An ad valorem tax is based on the value of the good or service, while a specific tax is based on the quantity of the good or service.

Ad Valorem Excise Taxes

Ad valorem excise taxes are based on the value of the good or service. This means that the amount of tax paid increases as the value of the good or service increases. Examples of goods and services that are often subject to ad valorem excise taxes include luxury cars and jewelry.

Specific Excise Taxes

Specific excise taxes are based on the quantity of the good or service, regardless of its value. This means that the amount of tax paid is the same regardless of the value of the good or service. Examples of goods and services that are often subject to specific excise taxes include cigarettes and gasoline.

Impact of Excise Taxes

Excise taxes can have a significant impact on the economy and on consumer behavior. They can discourage consumption of certain goods or services, encourage consumption of alternatives, and generate revenue for the government.

See Also

• Tax
• Ad valorem tax
• Specific tax
• Value-added tax
• Sales tax

References

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Excise

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  Graph showing GDP per capita PPP vs excises in 2016