Does Better Information Curb Customs Fraud?

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Export Fraud in India

“…Third, after a computer-based risk management system (RMS) that automatized the risk assessment was introduced in 2013 (for exports), making the process less reliant on customs officers' discretion. Our finding is consistent with other studies that highlight the discretionary power of officers as a potential source of fraud and evasion (Dutt and Traca, 2010;Chalendard et al, 2020). Fourth, for the trade of differentiated products, for which no reference prices exist and that are known to be evasion-prone (Javorcik and Narciso, 2008).…”

“…Last, we speak to the literature that studies the effect of enforcement on customs fraud (Dutt and Traca, 2010;Chalendard et al, 2020). In particular, we provide suggestive evidence that enforcement efforts increase for trade flows that are prone to fraud, such as those of differentiated products (Javorcik and Narciso, 2008), those with neighboring countries, and those subject to higher drawback rates (Bussy, 2021b).…”

Mandating Digital Tax Tools as a Response to Covid: Evidence from Eswatini

“…For some preliminary evidence on e-registration, see Knebelmann (2019), Kamara et al (2020) and Okunogbe (2021). See Carrillo et al (2017), Mittal and Mahajan (2017), Brockmeyer and Hernandez (2019), Shah (2020), Chalendard et al (2020) for more on the effectiveness of third-party data reporting in developing countries. There are many functionalities of e-Tax.…”

Containing Tariff Evasion

“…Containerized trade between France and Madagascar provides an ideal context to examine tariff evasion. Taxes levied at the border account for 48 percent of Madagascar's government total tax revenue in spite of rampant corruption and widespread tariff evasion (Chalendard, Duhaut, Fernandes, Mattoo, Raballand, and Rijkers, 2020;Chalendard, Fernandes, Raballand, and Rijkers, 2023). France is the second most important source country for Malagasy imports (after China) and is known to have strong tax enforcement capacity.…”