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Tariff evasion in sub-Saharan Africa: the influence of corruption in importing and exporting countries

Author

Listed:
  • Temesgen Worku

    (Department of Accounting and Control
    Addis Ababa University)

  • Juan P. Mendoza

    (Department of Accounting and Control)

  • Jacco L. Wielhouwer

    (Department of Accounting and Control)

Abstract

Multilateral organizations recommend sub-Saharan African (SSA) countries to increase international trade in order to attain sustainable economic growth. The benefits of trade can be hampered, however, by tariff evasion. Using trade data from 2008–2014 of 31 SSA countries, we examine how the association between tariff rates and value and quantity gaps (which are indicative of tariff evasion) is enhanced by corruption in both importing and exporting countries (SSA countries are referred to as importing countries, and their trade partners from outside SSA are referred to as exporting countries). Results of a series of tests show that corruption levels in both sides of the trade partnership reinforce the (positive) association between tariff rates and value and quantity gaps. This indicates that counteracting tariff evasion in SSA is a co-responsibility between trade partners.

Suggested Citation

  • Temesgen Worku & Juan P. Mendoza & Jacco L. Wielhouwer, 2016. "Tariff evasion in sub-Saharan Africa: the influence of corruption in importing and exporting countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(4), pages 741-761, August.
    • Handle: RePEc:kap:itaxpf:v:23:y:2016:i:4:d:10.1007_s10797-016-9407-2
    DOI: 10.1007/s10797-016-9407-2
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    3. Joël CARIOLLE & Cyril CHALENDARD & Anne-Marie GEOURJON & Bertrand LAPORTE, 2017. "Going beyond analysis of internal data to support customs modernization: a case study in Gabon," Working Papers P173, FERDI.
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    5. Andualem T Mengistu & Kiflu G Molla & Giulia Mascagni, 2022. "Trade Tax Evasion and the Tax Rate: Evidence from Transaction-level Trade Data," Journal of African Economies, Centre for the Study of African Economies, vol. 31(1), pages 94-122.
    6. Joel CARIOLLE & Cyril CHALENDARD & Anne-Marie GEOURJON & Bertrand LAPORTE, 2016. "Décloisonner l’analyse des données pour appuyer la modernisation des douanes : une illustration à partir du Gabon," Working Papers 201618, CERDI.
    7. Fawzi Banao & Bertrand Laporte, 2022. "Terrorism, Customs and fraudulent Gold exports in Africa," Working Papers hal-03889094, HAL.
    8. Cheung, Yin-Wong & Steinkamp, Sven & Westermann, Frank, 2020. "Capital flight to Germany: Two alternative measures," Journal of International Money and Finance, Elsevier, vol. 102(C).
    9. Olalere Isaac Opeyemi, 2022. "Predicting Trade Mispricing: A Gaussian Multivariate Anomaly Detection Model ," GATR Journals jber221, Global Academy of Training and Research (GATR) Enterprise.

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    More about this item

    Keywords

    Tariff evasion; sub-Saharan Africa; Corruption;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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