What is the key feature of excise tax?

The key feature of an excise tax is that it is levied on specific goods and activities, rather than being applied uniformly across a broad range of products. Excise taxes are typically imposed on items such as alcohol, tobacco, gasoline, and certain other goods or activities that the government chooses to regulate or discourage. This can be done for various reasons, including generating revenue and internalizing external costs related to the consumption or production of these goods.

Excise taxes are distinct from other forms of taxation, such as property taxes, which are based on the value of property owned. Additionally, excise taxes are not restricted to just import duties; rather, they can be applied to domestically produced items as well. This specificity allows governments to target taxes in a manner that reflects policy goals or health initiatives, such as reducing the consumption of harmful products.