Determinants and Pervasiveness of the Evasion of Customs Duties
AbstractEvasion of customs duties is a serious concern in developing countries, where tariff receipts are often important, but their collection is often problematic. We study theoretically and empirically the determinants of evasion across countries and products, based on a systematic analysis of discrepancies in trade declarations - when available - for both partners. We conclude that evasion of customs duties is greater in poorer countries, especially where the rule of law is limited. The consequences are likely to be the most serious in the poorest countries, where we find a one percentage point higher tariff to be associated on average with an understatement of imports of 1% or more. We assess some policy remedies and conclude that automated customs data treatment may be particularly useful.
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Bibliographic InfoPaper provided by CEPII research center in its series Working Papers with number 2010-26.
Date of creation: Nov 2010
Date of revision:
Tax evasion; Custom duty; Institutions; International trade;
Find related papers by JEL classification:
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
- K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
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