How is Excise Tax different from VAT?

The Excise Tax is different and separate from the Value Added Tax (VAT).

VAT is applied at each level in the supply chain whereas the Excise tax is applied only once either at the initial stage or at the consumption level.

Also, the introduction of the Excise Tax will meet two fundamental Government policy objectives, to raise Government revenues and also to discourage the consumption of goods considered harmful to health or the environment. This is an important policy reform in the UAE aimed at promoting economic growth and fiscal stability.