Do you wonder what the Excise Tax is all about?Do you wish to know what Excise tax examples are? or maybe you are asking ‘is income tax an Excise tax?” Well if you intend venturing into the sales of specific goods such as fuel, tobacco and alcohol , then you need to know what Excise tax is all about.
As a Manufacturer,Just like knowing about different taxes gives you an added advantage, Excise tax is no exemption as knowledge about it provides the right platform to give your business the financial flow it needs especially when documenting your business account.
Excise tax is simply the indirect tax levied on certain goods and services such as Alcohol, tobacco,fuel, airline ticket, heavy trucks, highway tractors, etc
In these article, we will be taking you through a journey about Excise tax rate, examples, rate and all you need to know about the Excise tax. Now lets plunge into it.
Excise Tax and rate
The tax is usually made as part of cost of the product, hence most users don’t usually see the excise tax , however these tax is already taken at several point of the goods and services that has the tax levied on them . These several points include:
- import stage
- the stage of sales by either Manufacturer and retailer
- production stage
so where does all the taxes go you may wonder? Most Excise taxes are taken into trust funds and used to fund activities such as highway development,airport improvement, and many more government facilities
Most times it can be used by the Federal Government as a means of ensuring price that the consumption of a product that exacts costs on others is discourage.
What is Excise Tax Rate?
Since the Tax Rate is an ad valorem tax ie it is not a fixed tax, its rate is based off percentage basis which implies the Excise rate on goods and service is calculated using the value of the product or service.