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Loading...Excise Tax, Sin Taxes or Luxury Taxes
An excise tax (sometimes called an excise duty, special tax, special duty or luxury tax or sin tax) is a type of tax charged on goods produced or on sale within the country (as opposed to customs duties, charged on goods from outside the country). Typical examples of excise duties are taxes on gasoline, tobacco and alcohol (sometimes referred to as sin taxes).
The Canadian Excise Act, 2001 has now become law, and was implemented effective July 1, 2003. Once it was implemented, duty free shops are the first to be affected. Excise duty licences were issued to a person or a business entity (e.g. individual, partnership, corporation, etc.) authorizing the person or business entity to carry on specific activities at one or more locations.
As a side note: Prostitution has been proposed to bear excise tax in separate bills in the Canadian Parliament in 2005. The reasons given by Canadian MPs entering the bill covered many of the above-mentioned areas, including extra funding for police protection and better healthcare for the prostitutes – however, so did many of the counterarguments.
Excise Duty Rate Summary on Tobacco Products – effective January 1, 2008
| Excise Duty | Additional Duty | |
|---|---|---|
| Cigarettes | $0.425 per five or fraction of five cigarettes | N/A |
| Tobacco sticks | $0.06325 per stick | N/A |
| Manufactured tobacco – other | $57.85 per kilogram | N/A |
| Raw leaf tobacco | $1.572 per kilogram | N/A |
| Cigars | $18.50 per 1,000 cigars | Greater of $0.067 or 67%* |
* 67% of the Canadian manufacturer’s sale price or of the duty paid value, if imported. (In reality, the additional duty would seldom be $0.067 per cigar, as the 67% rate will normally be the greater.)
Cigarettes, tobacco sticks, other manufactured tobacco – for duty free shops, ships’ stores or export markets
Canadian manufactured cigarettes
| For delivery to | Excise Duty (rates per five or fraction of five cigarettes) |
Special Duty (rates per cigarette) |
|---|---|---|
| Foreign or Canadian duty free shops, Customs bonded warehouses, or foreign or Canadian ships’ stores. | $0.374875 | N/A |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if not more than 1.5% of previous calendar year’s production. | N/A | $0.075 |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if greater than 1.5% of previous calendar year’s production. | $0.425 | $0.095724 |
Canadian manufactured tobacco sticks
| For delivery to | Excise Duty (rates per stick) |
Special Duty (rates per stick) |
|---|---|---|
| Foreign or Canadian duty free shops, Customs bonded warehouses, or foreign or Canadian ships’ stores. | $0.054983 | N/A |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if not more than 1.5% of previous calendar year’s production. | N/A | $0.055 |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if greater than 1.5% of previous calendar year’s production. | $0.06325 | $0.042 |
Canadian manufactured tobacco (other)
| For delivery to | Excise Duty (rates per kilogram) |
Special Duty (rates per kilogram) |
|---|---|---|
| Foreign or Canadian duty free shops, Customs bonded warehouses, or foreign or Canadian ships’ stores. | $49.983 | N/A |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if not more than 1.5% of previous calendar year’s production. | N/A | $50.00 |
| Export markets (other than to foreign duty free shops or for use as foreign ships’ stores) if greater than 1.5% of previous calendar year’s production. | $57.85 | $46.002 |
Imported manufactured tobacco (payable when delivered to a Canadian duty free shop)
| Product Category | Excise Duty | Special Duty |
|---|---|---|
| Cigarettes | N/A | $0.075 per cigarette |
| Tobacco sticks | N/A | $0.055 per stick |
| Other manufactured tobacco (excludes cigars) | N/A | $0.05 per gram |
Unstamped Canadian and foreign tobacco products imported as “traveller’s tobacco”
| Product Category | Excise Duty | Special Duty |
|---|---|---|
| Cigarettes | N/A | $0.075 per cigarette |
| Tobacco sticks | N/A | $0.055 per stick |
| Other manufactured tobacco (excludes cigars) | N/A | $0.05 per gram |
Comments
9 responses so far. Leave a comment
VRy interesting to read it 😛 😀
[Reply]
if crossing from an ontario border, do we only pay gst and duty on tires??
[Reply]
BoB
Reply:
September 23rd, 2009 at 10:51 am
I believe you’ll have to pay Ontario GST. Not sure about other provinces, but they are likely the same.
[Reply]
I would like to order jewelry or loose diamonds from the U.S. to Saskatchewan. I have read that there is no sin tax but it came from a web based jewelry store. What would i be looking @ in extra cost ?
[Reply]
Customs info
Reply:
August 11th, 2010 at 6:11 am
Personal or commercial? If you’re importing commercially for a business then you only pay gst and any duty. Personal you pay gst/hst duty and pst depending on province of residence.
Loose diamonds are duty free just gst/hst and any applicable pst. Rough diamonds require a kimberly certificate.
Jewellery depends on where it was made and if their semi-manufactured, findings, or finished pieces. Duty can be 0 to 8.5%. Plus sales tax. Need more details.
[Reply]
I am bringing in a diamond ring I bought in Costco they have nothing in writing that states place of origin salesman says made in us cost 600.00. Been in states just over 48 hours. What duty, taxes, and pat will I pay I am returning to alberta
[Reply]
Sorry for my typing us is supposed to be US and pat is supposed to be PST
[Reply]
hello,
i have purchased a gemstone strand necklace for $85 through ebay from india. how much and what all duties and taxes will i have to pay.
the necklace consists of uncut rubies and emerald and no metal – no gold , no silver.
[Reply]
sara
Reply:
April 27th, 2011 at 12:44 pm
hello,
i have purchased a gemstone strand necklace for $85 through ebay from india. how much and what all duties and taxes will i have to pay.
the necklace consists of uncut rubies and emerald and no metal – no gold , no silver
[Reply]