Excise duty is a tax charged on specific categories of goods - alcohol, tobacco products and fuel are the largest categories in South Africa - collected at the point of manufacture or import, on top of any VAT due.
What it means
Unlike VAT, which applies broadly to most goods and services, excise duty targets specific product categories, often for public health or revenue reasons, and is usually a much larger proportion of the final price for those goods.
Where it fits in
A business manufacturing or importing excisable goods carries excise duty as a direct cost of goods sold, separate from and in addition to the VAT it also charges and pays on the same goods.
Key rules
- Charged on specific goods: alcohol, tobacco, fuel and similar categories.
- Levied in addition to VAT, not instead of it.
- Collected at manufacture or import.
- A direct cost of goods sold for businesses dealing in excisable products.
