excise duty

Excise Tax

A tax on the manufacture or sale of a good or service over and above all other taxes paid on it. For example, a person may owe sales tax on the purchase of tobacco, but the state may also levy an excise tax on top of it. Likewise, one may owe both income taxes and excise taxes on a premature distribution of an IRA. See also: Sin tax.

Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

excise duty

an INDIRECT TAX imposed by the government on a product, principally those such as tobacco, petrol and alcoholic drinks, the demand for which is highly price-inelastic (see ELASTICITY OF DEMAND). Governments use excise duties both as a means of raising revenue (see BUDGET) and as an instrument of FISCAL POLICY. See CUSTOMS AND EXCISE.

Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

excise duty

an INDIRECT TAX levied by the government on certain goods, most notably tobacco, oil and alcoholic drink. Demand for these goods is price inelastic (see PRICE ELASTICITY OF DEMAND) so that duty increases, implemented as part of FISCAL POLICY, will not only raise government revenue but also leave customers with less money to spend on other goods. See TAXATION.

Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005