These taxes are either paid by merchants who pass them on to consumers or sometimes by consumers directly. To describe how the excise tax system works exactly, we’d suggest calling it a business tax. We all are aware of the income tax, excise tax also forms a portion of a revenue generator.
The business collectors of these taxes are required to do the job remaining under the obligations applied to them. These excise taxes, after being collected, are then passed on to the local government and state. The excise tax imposed on manufacturing goods often falls into two main categories, namely either Ad valorem and Specific.
Ad valorem is a fixed percentage of charges on services and goods, and Specific is like a fixed amount of currency. However, these charges will be applied according to the quality of the products that one purchases.
Just like any other complicated procedure, excise taxation also has consultants and excise tax agents for you to provide and offer expertise and good advice. A good excise tax consultant is expected to do the same and basic advice and guide on the complexities and complications regarding excise taxes.
Their services can include consulting, tax system implementations, registrations, and compliance, refund opportunities and planning, disputes and representation, due diligence, and CPE training. The taxpayers are often met with very complicated regimes that necessitate or demand detailed description and understanding that are provided by excise tax agents and consultants.
Since it’s a complex procedure, the companies overpay taxes due to relying on the documents and estimated calculations. Under these circumstances, taxpayers require someone to support them amid these accessions, provide opinions and suggestions, to be defended in inspections, and represent their appeals.
Excise taxpayers also want the risk pouring on them to be also less and to prevent themselves from overpayment. Hence, all of these services are provided by an excise tax consultant.
Just like any other responsible government, UAE, as well as aims to protect citizens from any detrimental products or goods. This is why, in the light of this initiative, the excise tax applies, from December 1, 2019, of 100 percent in UAE on electronic smoking liquids and devices.
Additionally, a 50 percent excise tax is also demanded on sweetened drinks. The aim of this imposition is to prevent citizens from consuming products harmful to their health as well as to raise revenues. These revenues are known to be ‘Rates of Excise Tax in UAE,’ collected for the purposes of spending on public services.