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Using Internal and External Sources of Information to Reduce Customs Evasion

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posted on 2024-09-06, 06:52 authored by Cyril Chalendard
This paper aims to identify some factors that reduce evasion of customs duties in developing countries. Following the recent literature on customs evasion, we proxy customs fraud by discrepancies in bilateral trade statistics. Estimates first show that the more frequently a product is imported, the more customs fraud reduces. We argue that this result is indicative of the fact that customs officers use what they have learned from similar import declarations - use customs' internal information - to better assess the compliance of declarations. Then, we show that relying on an information provider - a pre-shipment inspection company in our case - seems to increase tax enforcement. Results indicate that pre-shipment inspections significantly reduce observed discrepancies in trade statistics. In line with previous studies, we find that the semi-elasticity of evasion increases with the tax rate. Finally, estimates confirm that enforcement is product-varying. Results are robust to various robustness checks.

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Publisher

Institute of Development Studies

Citation

Chalendard, C. (2017) Using Internal and External Sources of Information to Reduce Customs Evasion, ICTD Working Paper 62, Brighton: IDS.

Series

ICTD Working Paper 62

IDS Item Types

Series paper (non-IDS)

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Institute of Development Studies

Language

en

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Governance

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    International Centre for Tax and Development

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