The Excise Tax Act (ETA) is a federal law in Canada that administers and collects excise taxes on specific goods and services. Its primary objective is to raise revenue for the government while supporting public policy objectives such as reducing smoking or promoting environmentally friendly products. The ETA establishes rules and regulations for calculating and reporting excise taxes, provides exemptions and rebates, enforces compliance, and has undergone significant changes since its introduction in 1921. The Act is crucial in the Canadian government's revenue-raising efforts and ensuring individuals and corporations pay their fair share of taxes.
Charging an excise tax on goods has a long history in Canada, dating back to the early 20th century. The first version was enacted in 1921 as a measure to raise revenue for the government. Over the years the legislation has undergone several significant changes. That includes the introduction of the Goods and Services Tax in 1991 and the introduction of a revamped Excise Tax Act in 2001, which modernized and streamlined the excise tax system. These changes have been designed to make the ETA more effective at raising revenue for the government while supporting public policy objectives.
The Excise Tax Act is a complex piece of legislation that includes multiple schedules and regulations. The Act is a crucial tool in the Canadian government's efforts to raise revenue and support public policy objectives while ensuring individuals and corporations pay their fair share of taxes.