Excise Duty and the calculation of duty

Why excise duty is paid?

• Excise duty is taxed on certain specified home produced goods for example tobacco meant for consumption in the home market in order to:
• Raise revenue for the government.
• Discourage consumption of dangerous products.
• Reduce domestic demand.
• Release more goods for export.

Methods of calculating duty.

• Ad valorem duty:
• This is calculated based on the value of imported goods.
• For example 75% on luxury goods.
• Specific duty
• This calculation is based on quantities or volume of imported goods e.g. 25% per kg of imported material.

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