EXCISE TAX

What Is Excise Tax?

Excise Tax is a selective indirect tax imposed on specific goods that are considered harmful to human health or the environment. Unlike VAT, which applies broadly to most goods and services, Excise Tax targets particular products at high rates, making compliance critical for businesses involved in these sectors.

In the UAE, Excise Tax applies mainly to:

Tobacco and tobacco products

Energy drinks

Carbonated and sweetened beverages

Electronic smoking devices and liquids

The tax rates can reach 50% to 100%, which means a small compliance mistake can quickly turn into a major financial exposure.