Excise duties and special taxes are an essential component of the tax system in the Republic of Croatia. This paper traces the history and development of excise duties as a special tax on consumption and analyzes their role in modern tax systems. Additionally, it explores the functions and objectives of excise duties and the legal framework governing these taxes in the Croatian tax system. Special attention is given to analyzing the role of excise duties within the Croatian tax system. Excise duties are seemingly a painless method of taxing citizens since they are primarily applied to non-essential products such as alcohol, tobacco, luxury goods, and more. The system of excise taxation offers advantages, including simplicity and cost-effectiveness in tax collection and relative revenue stability even amidst economic fluctuations. The paper also underscores how excise duties and special taxes have become an indispensable component of the Republic of Croatia's budget, constituting a significant portion of budgetary revenues. In 2022, excise duties accounted for 17% of budgetary revenues, highlighting their importance in financing government activities and projects. The paper emphasizes that the reduction in excise duty revenues in that year resulted from an expected decrease in the consumption of excise-taxable products and legislative changes related to excise duties and the taxation of energy resources. This paper provides a deeper understanding of the role of excise duties in the Croatian tax system and their contribution to budgetary revenues. It explores how excise duties align with European standards and their impact on economic stability and consumer spending.