Excises are indirect taxes levied by tax authorities on the consumption of specific products or services (often considered to be harmful to consumers’ health and the environment, or luxurious products) and are considered an inevitable cost of doing business. They often apply to products such as alcohol, oil and tobacco. By imposing excise taxes, countries generally attempt to discourage the consumption of these products and to raise revenues.

But these taxes apply to different products in different countries, sometimes at different stages of the supply chain. In particular, domestic excise duties can become “trapped” as goods and services cross borders. Managing excise taxes and understanding opportunities to mitigate their impact is crucial for all businesses operating in affected industries.