Estimating Border Tax Evasion in Mozambique

Authors: Van Dunem, Joao Ernesto; Arndt, Channing

Source: Journal of Development Studies, Volume 45, Number 6, July 2009 , pp. 1010-1025(16)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

The relationship between border tax rates and evasion is examined for Mozambique using the methodology developed by Fisman and Wei (2004). We find that high tax rates are associated with high levels of under-reporting of import values and that tax rates have a strong and positive effect on tax evasion. Results also strongly confirm the presence of fraudulent classification of merchandise into lower taxed product categories. Finally, analysis of the revenue implications of lower trade taxes finds that the revenue curve is quite flat but remains upward sloping with respect to the tax rate when only evasion is considered.

Document Type: Research article

DOI: http://dx.doi.org/10.1080/00220380902952324

Affiliations: 1: University of Copenhagen, Copenhagen, Denmark

Publication date: 2009-07-01