2017-01-10 00:00:00TaxesEnglishFind out what an excise tax is and how a high excise duty may affect businesses that produce certain products.https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2017/01/Store-manager-talks-with-customer-about-excise-duty.jpghttps://quickbooks.intuit.com/ca/resources/taxes/excise-duty/What is Excise Duty?

What is Excise Duty?

0 min read

An excise duty is a tax charged on certain Canadian products, including wine, spirits, and tobacco. Unlike Canadian GST, an excise duty is an indirect tax levied on the manufacturers, who include it in the price of the product. For example, when you buy a bottle of Canadian wine, a portion of the price is the excise duty that the producer has to pay to the government. To cover the high excise duty, Canadian businesses that produce and export excisable goods need to price their goods higher than exporters of similar goods in countries with low excise duty. For example, a bottle of Canadian wine may cost $50 in the United States, while a bottle of Scottish wine may cost only $20. This lowers the competitiveness of these Canadian businesses, as customers may choose to buy lower-priced products.

References & Resources

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

Related Articles

What You Should Know About Taxation of Legalized Marijuana

With the passing of the Cannabis Act, Canada becomes the first G7…

Read more

What Is Duty of Good Faith?

If you own a small business that enters into lots of contracts,…

Read more

Estimating Cross-Border Shopping Duty and Excise Taxes

You may have to pay import duty and excise taxes on the…

Read more