This study investigates the effects of Customs Duties and Value-Added Tax (VAT) on the clothing industry and retail supply chains within Kashtban Trading Company in Dubai. Utilizing a quantitative survey design and Structural Equation Modeling-Partial Least Squares (SEM-PLS), the research explores how these fiscal policies influence operational efficiency, financial performance, consumer behaviour, and market positioning. The findings reveal that Customs Duties significantly enhance the efficiency and effectiveness of retail supply chains, while also positively impacting the cost structures and competitiveness of the clothing industry. VAT compliance demonstrates a strong positive influence on financial performance and market positioning in the clothing sector, as well as moderate improvements in retail supply chain operations. The study contributes to existing literature by providing industry-specific insights, bridging gaps in understanding fiscal policy impacts in a unique economic setting like Dubai. Practical implications include recommendations for businesses to strategically adapt to these fiscal measures to optimize performance and maintain competitiveness. This research offers valuable perspectives for policymakers aiming to refine taxation strategies to foster economic sustainability and business growth.