The Effect of Contraband On Government Revenue: Case of Segen Area People's Zone

Global Journal of Management and Business Research: B
Economics and Commerce

Volume 18 Issue 3 Version 1.0 Year 2018
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals
Online ISSN: 2249-4588 & Print ISSN: 0975-5853
The Effect of Contraband on Government Revenue: Case of

Segen Area People’s Zone
By Addisu Karafo
Jinka University
Abstract- The main objective of this study was to assess the effect of contraband on government revenue
of Segen Area People Zone. The study was descriptive used only primary data from revenue authority
employees and contraband business operators through structured questionnaires. The targeted
respondents were selected using simple random sampling and judgmental sampling technique. The
collected data were analyzed statistically with statistical software. The result of the study shows that the
motivating factors were lack of formal income, lack of job and the demand and supply gap in formal
operation. The finding also reveals that contraband undermines the government revenue, increases the
tax burden on formal business operators and may remove them from official system in to informal nontax
paying system. Moreover; it kills the need of the investments and innovations in the country, wipes out
foreign currency that a country may earn from legal import export and creates unfair competition in the
market. The process of controlling contraband faces a great challenge like a bribe, insufficient skilled and
competent manpower, lack of ongoing training, low salary of the workers, corruption, inadequate
enforcement and penalties and ineffective respond to tax evasion in the area. Accordingly; to mitigate
contraband, the government should raise domestic innovations, manufacturing and human resource
capacity development, strengthen strong enforcement of the rules and punishments, and even create a
conducive environment for effective coordination and communication among controlling unit and the
general public.
Keywords: contraband, government revenue, illicit business, smuggling.
GJMBR-B Classification: JEL Code: H27
TheEffectofContrabandonGovernmentRevenueCaseofSegenAreaPeoplesZone
Strictly as per the compliance and regulations of:
© 2018. Addisu Karafo. This is a research/review paper, distributed under the terms of the Creative Commons Attribution-
Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-nc/3.0/), permitting all non-commercial use,
distribution, and reproduction in any medium, provided the original work is properly cited.
The Effect of Contraband on Government
Revenue: Case of Segen Area People’s Zone
Addisu Karafo
Abstract- The main objective of this study was to assess the task of facilitating the flow of legal trade while
effect of contraband on government revenue of Segen Area dismantling organizations involved in smuggling
People Zone. The study was descriptive used only primary operations. Smugglings dampen the economy in
data from revenue authority employees and contraband
multidimensional ways. It destabilizes the legal industry,
business operators through structured questionnaires. The
2018
restrains innovation and investments, reduces
targeted respondents were selected using simple random
government revenues, fuels transnational organized
Year
sampling and judgmental sampling technique. The collected
data were analyzed statistically with statistical software. The crime and hampers the health and safety of consumers
result of the study shows that the motivating factors were lack (FICCI, 2016).
37
of formal income, lack of job and the demand and supply gap Ethiopia is a landlocked country and
in formal operation. The finding also reveals that contraband experienced strong, broad-based growth averaging
Global Journal of Management and Business Research ( B ) Volume XVIII Issue III Version I
undermines the government revenue, increases the tax burden 10.5% a year from 2005/06 to 2015/16, compared to a
on formal business operators and may remove them from regional average of 5.4% (World Bank, 2017). This
official system in to informal nontax paying system. Moreover;
growth brought with it positive trends in poverty
it kills the need of the investments and innovations in the
reduction in both urban and rural areas. Despite this
country, wipes out foreign currency that a country may earn
from legal import export and creates unfair competition in the marvelous change; the tax revenue collection
market. The process of controlling contraband faces a great performance of the country is lowest compared to an
challenge like a bribe, insufficient skilled and competent average tax collection performance of sub-Saharan
manpower, lack of ongoing training, low salary of the workers, African countries, (Alemayehu, 2015) and even below its
corruption, inadequate enforcement and penalties and neighboring countries (Tilahun, 2014 cited in Workineh,
ineffective respond to tax evasion in the area. Accordingly; to 2016). This low performance is an indication of illicit
mitigate contraband, the government should raise domestic trade activities outside the formal business activities who
innovations, manufacturing and human resource capacity
evade and avoid tax revenue from government. The
development, strengthen strong enforcement of the rules and
products on such illicit trading activities are smuggled
punishments, and even create a conducive environment for
effective coordination and communication among controlling goods which have no official entry point in the country,
unit and the general public. do not have customs document or prior approval to
Keywords: contraband, government revenue, illicit enter into or depart from the country. The agents
business, smuggling. involved in these activities violate the law that govern the
import and export procedure and thus avoid the
1. Introduction payment of all applicable taxes for the importation or
1.1 Background of the Study exportation of goods.
G
lobalization is an engine for economic growth 1.2 Statement of the Problem
and significantly enhances trading activities. It Products crossing a border in to or out of the
also boosts opportunities for informal business country illegally are informal transactions. They remain a
operators in informal economies creating a multi- great challenge for countries in generating tax revenue
dimensional challenge for the administration. Informal for long periods of time. They expand the evader’s
economy comprises those economic activities that potential of evading tax revenue from government
circumvent costs and excluded from the benefits and treasury and disappoint those who operate in legal
rights incorporated in administrative rules and economy forcing them to shift their activities to illegal
regulations. It is part of an economy that is not taxed, markets. Moreover; they kill micro small and medium
monitored by any form of government or included in any business enterprises growth shutting their market by
gross national product (GNP). providing forbidden and quality products produced with
Illicit trading activities across a border such as advanced technologies at a low price. By removing
contraband are invasive socio-economic perils deep- revenue from government and demolishing the growth
rooted in the global trading system. Their syndicates are of micro small and medium enterprises, the
drawn by huge profits while benefiting from weak contrabandist puts the economy of the country at risk.
legislation. Enforcement agencies face the formidable These contraband activity most of the time
Author: Lecturer, Jinka University, College of Business and Economics.
typifies developing and underdeveloped nations which
e-mail: [email protected] are characterized by high manpower, lower per capital
© 2018 Global Journals
The Effect of Contraband on Government Revenue: Case of Segen Area People’s Zone
income and the biggest portion of the economy leading products largely enter the area from Oromia region
the life by cultivation. These nations have no well- Moyal to Konso and then distributed to the rest of Zone
established infrastructures; agriculture covering the Woredas and other parts of the region and country at
largest percentage of GDP and industries that produce large. Thus this study concentrates on Segen Area
products with poor qualities. They are also subject to People’s Zone because of the time and cost that it takes
foreign cultures invasion and dominance of the to cover the entire country. The targeted business
youngest people losing their identity. Consequently; the operators also exist outside the formal system, so the
individuals in these countries are forced to participate in owners may refuse to participate and fill the
illegal activities as an agent or direct for themselves. questionnaires appropriately.
In Ethiopia, contraband is not a recent
1.5 The Significance of the Study
phenomenon but existed long periods ago. Since then
This study focuses on the effect of contraband
smugglers did not hesitate to smuggle goods into and
which is an illegal activity undertaken against
out of Ethiopia, and they are still doing it in spite of all
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government revenue and the economy at large. So this

laws and regulations 1. They smuggled products like
will have the following benefits:
Year
electronics and electrical goods, garments of various

kinds, perfumes, cosmetics, habit-forming drugs, • It can help tax authority to establish ways that will
38 armaments, and others. The products are smuggled help them to eradicate if possible or reduce
from countries like Sudan, Eritrea, Kenya, and Djibouti contraband and enhance its tax revenue potential.
(Zemzem and Teklu, 2017). These neighboring countries • It can also help the government to establish a policy
knowingly allow their border for such products to cross that will reduce the level of informal economy in the
Ethiopia to raise illegal activities in the country that will country.
jeopardize the economy of the country at any time. • It can also act as a stepping stone for other
Thus, it is against the problems stated above research on the same area.
that this study tries to investigate the effect that products
1.6 Organization of the Paper
crossing the border and entering the country unlawfully
This study is concerned with contraband in
through Moyale have on the revenue of the Segen area
Segen Area Peoples’ Zone and will have five parts. The
peoples zone tax authority.
first part is about the introduction and incorporates
In line with the above-stated research problem,
background, statement of the problem, objectives,
the study will answer the following research questions:
scope and limitation, significance and organization of
 Why do individuals involve themselves in the paper. The second section was about the literature
contraband activities? review related to the study followed by methods used to
 What are the effects of these activities on collect data, select sample and analysis of the collected
government revenue? data. The fourth section presents data analysis and
 What are the measures taken or planned to be discussion and the fifth section of the study then
taken against activities? concludes the study.
1.3 Objectives of the Study
2. Review of Literature
1.3.1 General Objective
The general objective of this study is to 2.1 Contraband and its Meaning
investigate the effect of contraband on government tax Products produced in or outside a country
revenue of Segen Area Peoples’ Zone. cross a border to abroad or into the country from
outside in two ways. In the first case legally by those
1.3.2 Specific Objectives
who have legal license to do it and pays tax for the
• To assess the reasons why individuals engage government on the income generated from such
themselves in contraband activities. transactions. They deal with products that are allowed to
• To assess the effect of this activity on government be imported or exported by rules and regulation of the
revenue of the area and country and support the economy of that country. On
• To examine the measures taken and planned to be the other hand, there are people who engage
taken against the activity. themselves in activities that contradict the legal system
1.4 Scope and Limitation of the country. They had no state-issued permits, license
Segen area people zone consists of five or registration and did not pay tax on the products.
Woredas namely Konso, Dirashe, Burjy, Amaharo and Moreover; the products being imported or exported may
Ali. These Woredas are near one another and located in be forbidden legally because of the effect that they may
southern region of the country bordering the region with have on the socioeconomic and political system of the
Oromia region. However, the contraband or smuggled country. In general word, the products entering or
leaving the country in such a way are named as
1
www.erca.gov.et/index.php/customs/org
contrabands.
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The word contraband refers to property that is 2.2 Determinants of Contraband

illegal to possess or transport and may be goods that Some of illicit transactions may be carried out
are illegal to import or export and are attempted to be across a border between countries by illegal traders or
smuggled into a country. Contraband goods are usually by licensed business owners whose aim was to escape
subject to seizure by government officials (https:// government tax. This was the problem for all countries
definitions.uslegal.com/c/contraband). The products across a globe for an extensive period of times and still
have no official entry point, do not have customs exists regardless of the measures developed and taken
document or prior approval to enter into or depart from by governments. However; what remained an answered
a country so, they violate the law that governs the import by academicians, government and even international
/export procedure and thus avoid the payment of all organizations was, why do people engage themselves
applicable taxes for the importation or exportation of in such illegal activities given its existence outside
goods (www.erca.gov.et/index.php/customs/org) and government control?
has harmful effect on the socioeconomic development People participate in contraband activities
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of a country. directly by themselves or assign agents that will act on
Year
In Ethiopia, this contraband enters the country behalf of them for commission base. They are motivated
in different directions from neighboring countries namely by various factors may be to avoid taxes and to secure
Kenya, Sudan, Eritrea, Djibouti, and Somalia. The illegal competitive advantage, to avoid customs 39
operator brings the products on foot, pack animals, checkpoints where goods and their documents are
Motor Vehicle and Cars that gives transport service to examined, to make a living and to escape from the
the public. Moreover, the public office cars that are unemployment prevailed in the country (www.erca.gov.
provided by the government to officials for office et/index.php/customs/org). Others involved in the
purposes like ambulances and those cars that carry oils contraband trade as acts of political defiance.
and gas from the center to different areas of the country Irresponsible and anti-peace elements may smuggle
also participate in supporting in such evil activities. guns and hand grenades into the country to commit a
Some are trafficked hidden within areas such as crime, to damage public infrastructure and to create
automobile tires, doors, fenders, bumpers, fuel tanks, political instability in the country or to cause an
and in other secret compartments of trucks, and trains. atmosphere of social unrest. Moreover; consumer's
Even more; some contraband goods are willingness to buy goods on the black market is the
occasionally smuggled into and out of the country stuck other factor that drives smugglers (www.erca.gov.et/
in containers with other legal shipments allowed to be index.php/customs/org). Smuggled goods are sold at a
imported or exported after fulfilling customs formality. low price and this has made thousands of poor people
Drivers of trucks which transport legal shipments stop prefer to buy smuggled products than legally imported
their vehicle en route and load illegal goods in to the goods. External factors like political instability, social
container of legal products. Smugglers are also assisted unrest and economic crisis in the neighboring countries
by some dishonest customs officers at check points and may also contribute to the expansion of contraband
local security forces. Smugglers bribe them and enter or trade in a given country.
take their goods into or out of the country illegally. In many parts of the world, the import and
To convey their goods, smugglers cross the export policies usually consider the effect that the
land borders of the country and use routes that are not products may have on the economy of the country.
under the control of the federal police. The large part of Accordingly, there are products which are allowed by
the Ethiopian border encompasses extensive lowland the import/export policy of the country and also
areas 2 which are difficult to fully control by the federal prohibited even if the demand for the products exists in
police. As a result, smugglers can easily cross the that country taking in to account their effects. In such
border with their substantial smuggled goods. The cases, prohibitions effectively prevent trading in
smugglers, experienced in running contraband goods forbidden products on the legal market, but these
and adept at traversing the country's border, are canny products continue to be desired, wanted and insisted by
in looking for other devious routes when their way was consumers. So the absence of legal supply leaves
blocked by federal policemen. They are also violent plenty of opportunities for contraband supply to
enough to intimidate or kill anyone standing in their way. substitute for it. Lack of legal supply to meet this
As a result, many elements of the Ethiopian law demand for prohibited products (demand gap) may
enforcement community have lost their priceless lives in force individuals to engage themselves in illicit activities.
the fight against smugglers. Using the above mentioned The level of tax burden also plays great role in
devious devices/methods, smugglers deliver the economy in expanding the market of contrabandists.
contraband goods to their secret stores and make them Business peoples may join refusing the level tax they are
available for selling and distribution. being charged by the government. A well-established
tax system considers the ability to pay for the people
2
www.erca.gov.et/index.php/customs/o and also have a pivotal role in inspiring micro small and
medium business enterprises in the economy. However; financial and social costs to economy, and society
many countries mainly developing countries charges (FICCI, 2016).
their peoples without ability consideration to meet the 2.3.1 A Loss of Government Revenues
level of tax they have aimed to collect in that fiscal year. The smuggling of goods or products can be
They may do this by increasing tax rate or forcefully considered as one of the tax violations that attack a
incorporate the business into tax net. Thus, this moves country’s tax system. It dampens legal imports and
the business peoples to smuggling creating higher tax drastically decreases the volume of revenues collected
evasion in that country. Several studies by Bhagwati, from various duties and levies by state agencies.
(1964); Fisman and Wei, (2004); Mishra, (2008) and Customs duty forms a significant part of the Central
Buehn and Farzanegan (2011), pointed out that tax rate Government revenues, which shows a decreasing trend
is vital to push factors for smuggling. over the past few years (FICCI, 2016).
Moreover; effective law enforcement in the Illegal trade in contraband products deprives
nation is a fundamental element in keeping the people in government tax revenue because the product crosses
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that tax system and reduce illegal acts. A country that the border illegally without payment of tax. When goods
Year
has fine law enforcement experiences less illicit are conveyed secretly or illicitly into or out of the country
activities. A significant measure for lack of a successful without the payment of customs duty and taxes, the
40 enforcement mechanism is the number of policemen government loses much revenue (www.erca.gov.et/
per a population and level of investment in technology index.php/customs/org). The eventual outcome of the
and training that support surveillance, which enables revenue lost is that it hampers development programs.
proactive and effective enforcement actions possible. Therefore to make the development programs feasible
The costs of smuggling depend on the probability of and to finance them, the government may be forced to
being caught and punished by the authorities, so increase taxes or adjust other sources of income. The
intensifying enforcement increases the costs of burden of covering these shortages falls on honest
smuggling in the form of punishment, confiscation, and taxpayers who in turn lead to higher prices of
detection (Martin and Panagariya, 1984). The study commodities which in turn can contribute for the growth
shows a significant negative correlation between of black-markets or as the tax increase drive up the
effective enforcement and smuggling (Buehn and price of domestically produced and imported goods,
Farzanegan, 2011). Low risk of the law enforcement with many consumers seek lower-priced products through a
profitability from tax evasion from smuggling enhances variety of alternative venues and channels, many of
the motivation for the illegal act of smuggling. which are illegal. (www.erca.gov.et/index.php/customs/
Countries with low innovations and lower level org).
of technology of the domestic industries to produce new The main objective of taxation is to reduce the
products that contend smuggled products in quality and income inequality among the people usually using
price may experience a higher number of peoples progressive tax system. Through this tax system, high-
involved in contraband activities. The imported products income earners pay accordingly and the poor as well.
illegally satisfy the needs of the consumers with However, contraband business violates this and
emerging technologies, new products with better quality amplifies income disparity or the earnings gap between
and performance (Bakhtiyari & Salarzaei, 2016). the rich and poor. They are the main parts of the group
Smuggling of imported goods expands due to who are recognized legally in evading government
enhanced public demand. Ambition value of imported revenue. The products entering or parting the country by
goods with the perceived better quality compared to these illicit traders are hidden from the view of
domestic commodities, coupled with enhances government and are sold surreptitiously. They use the
purchasing power tends to provide impetus to poor on a little compensation to carry the smuggled
smuggling. Findings of the subsequent section on the products on foot or other means from the border to their
extent of smuggling show that weakness of domestic store. They accumulate the wealth while the living
industry in producing quality machinery and electronic standards for many stagnate because they are not
goods could be one of the causes for smuggling of paying as formal business peoples.
imported goods. 2.3.2 Impact on Domestic Industries and Innovations
2.3 Effect of Contraband The flow of contraband products into a country
Regardless of different approaches to weakens local industries by distorting the prices of the
definitions of contraband, its effects are numerous and products. These illegal, illicit traders well know by the act
economically significant. It is a serious problem and its of providing the products at chipper prices which will
impact is far-reaching, affecting various stakeholders disappoint and may also remove local producers from
including Government, domestic industries and citizens the market. Their intension was evading and avoiding
of the country. Most customs, border and law tax and regulation, so their chip price may result in the
enforcement officials, policymakers, and academicians breakdown of domestic industries or force domestic
agree that illegal trans-border trading results in major producers into bankruptcies.
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Micro Small and Medium enterprises are the for government budget by evading legal duties and
principal employment generators and exert a strong taxes/tariffs. A developing country relies more on
influence on the economies of all countries. They are the indirect taxes as compared to direct taxes and low
fertile sectors regarding of innovations and quick indirect tax collections may have harmful consequences
remedy for unemployment and also increases tax for the government’s ability to provide public goods. The
revenue for the government. Moreover; they are the provision of public goods increases the productivity of
backbone of every economy in raising the economy economy (Loayza, 1996), and thus not creating such
through the enhancement of import and export of the public products has a harmful effect on productivity,
country. However; contraband operators remained the development, and economic growth (Norton, 1988).
main hindrance for these entrepreneurs by providing Smuggling may have a negative effect on
quality products produced by advanced technologies at official indicators such as growth and income
lower prices. By doing this, they downsize domestic distribution. It involves bribery and other forms of
entrepreneurs development and expansions. corruption and tends to promote criminal behavior in the
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Innovation in the form of the conception of new economy (www.ficci.in/spdocument/20807/final).
Year
ideas for the development of new products or processes Smuggling may result in mass fall-down in domestic
and experimentation 3 has been recognized widely as an companies who are unable to counter cheap imports,
imperative driver of economic growth. Innovators protect leading to surging in unemployment in the country. 41
their thoughts through patents, copyrights, design rights 2.3.5 Health and Safety Risks
and trademarks. Without adequate protection of these A contraband operator also carries products
intellectual property rights, the incentive to develop new that are risky for society. They deal with prohibited
ideas and goods is reduced, thereby weakening the goods like narcotics and illicit tobacco which are the
innovation process. In industries where product serious threat to the life of many citizens of the country
development requires significant investment and (WEF, 2012). And pornography materials which display
innovation, smuggling of counterfeit product impairs genitals and show sex acts in an offensive way, thereby
investments and innovation by undermining the efforts eroding the moral values of the society. Even although
of innovators and discouraging them from further the legal system of the countries prohibit the importation
research and development, which ultimately hampers such products, they are entering the border increasingly
overall growth of the economy. with the increasing number of users.
2.3.3 Threat to Society Habit–forming dangerous drugs debase/
Smugglers involved in clandestine activities also demoralize the moral senses of the youth and others
pose a serious threat to society. It affects the internal who take illegal drugs for pleasure or because of
structure of a society by creating powerful illegal addiction and it also cause them a wave of sickness
institutions (Dominguez, 1975). It expands the black when they are unable to continue captivating it. The
market and increases convergence between organized poor quality smuggled goods can produce health
crime, terrorist groups and other threat networks problem in the society. In their attempt to control drug
available at (http://www.state.gov/documents/ trafficking, federal policemen catch people and travelers
organization/250513.pdf). Smugglers and their system who bring illegal drugs into the country (www.erca.gov.
outwit the national borders imposing security threat et/index.php/ customs/org).
and earnings from this illegal activity may be used
2.4 Measures Against Contraband
finance insecurity that increases the policing costs
Cross-border trade below the radar of
(Burke, 2013).
government oversight is both a boon, and a curse for
Antisocial behavior is conduct that disrupts
many African economies (www.ictsd.org/bridges-news/
society or displays disdain or hostility to it. For instance,
bridges). However; in many countries particularly Africa
committing a crime is antisocial manners. Such kind of
the cost of contraband or informal cross-border trade
behavior can be intensified in society by the body of
outweighs the benefit because of this governments are
persons who used smuggled in weapons for violence
standing against this activities. They frame some of
activities calculated to cause death, robbery, burglary,
measures that they think will reduce or eradicate
rape and other crimes. Therefore smuggling armaments
contraband and other illegal cross border trades and in
into the country weakens the struggle to maintain peace
turn enhance domestic production.
and order in the society available at (www.erca.gov.et/
Informal cross-border trade touches everybody
indexphp/ customs/ others/101contraband).
in the community. So the prevention of contraband
2.3.4 A Negative Effect on the Economy needs a wide range of actors including government,
Monetary costs arise from smuggling due to both regional and local administrators, and the society
evasion of taxes and tariffs. Smugglers are extra burden at large. The government by itself cannot stop informal
trades, so should work together with the community
3
www.ficci.in/spdocument/20807/final. where the contrabandist were located and conceal their

products after crossing the border. The Ethiopian imprisonment from 7 to 15 years (Customs
government has established a new strategy against Proclamations No.622/2009) 4. According to sub article 2
contraband and based on this strategy the government of the same article, any person who transports, stores,
has disbanded customs police, the former agent offers for sale or buys goods referred to in sub article 1
responsible to prevent contraband, and replaced it by of this article while being or ought to have been aware of
the federal police as of July 2008. In addition to this, the the illegality of their acquisition shall without prejudice to
government has amended customs and tax laws. This the forfeiture of the goods and equipments used in the
amendment has helped to streamline taxation commission of the offence and the proceeds thereof
procedure and to empower the federal police for prevent without affecting the right of third parties who transacted
contraband (www.erca.gov.et/index.php/customs/o). in good faith, be punishable with a fine equivalent to the
However; federal police only can't carry the burden of amount of the customs duties and taxes payable on the
averting contraband alone, so they need to work with goods and with rigorous imprisonment from 7 to 15
regional and local administrators, and the community. years. According to sub-article 3 of article 92 stipulated
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As a result of the active participation of them in fighting in proclamation 622/2009, where the offense is
Year
against contraband, the volume of smuggled goods committed by the use of force or by an organized group
that enter for example into Diredawa via Shinile Zone with the offender of the punishment shall be, without
42 has decreased (Paper on strategy to prevent prejudice to the forfeiture of the goods seized and fine
contraband, 2009). from 15 to 20 years, rigorous imprisonment.
Information and knowledge gap usually are The other approach connected with the strategy
bases of failing for many individuals, entrepreneurs, and to prevent contraband is allowing border trade. By
companies. Having awareness and information about making border trade with the neighboring countries:
the advantage and disadvantages of something gives a Somalia, Sudan, Kenya and Djibouti, the government
clue to accept or reject it. Enlightening the general has tried to collect taxes. The border trade has been
public and creating awareness about the effects of carried out by the directives issued in 2000 and 2001 by
contraband on the economy of a given country plays a the Ministry of Trade and Industries. The objectives of
vast role in challenging the increasing informal cross- the border trade are to let the residents in the border
border trade activities. Contrabandists usually use the area fulfill their demand for consumption goods, to let
harsh economic and financial condition of the public them use border trade as a means of securing the
and use them to carry illegal products from the border necessities of life, to decrease the activities of
through challenging ways using motorbikes, animals contraband and to promote legal trade. By opening the
and human back particularly females or hide the door to border trade, the government anticipates some
contraband from government officials. They are doing smugglers will abandon their vicious practice and turn
this because of poor understanding about contraband into productive citizens of the country. Export items for
and abet for contrabandists even and abuse the border trade are typically consisted of a pulse, livestock
government officials assuming that officials are blocking such as goats, sheep, camel, and others. Import items
the business of the people. Therefore, providing are mainly food items, clothing that are usually dressed
education is necessary to infuse into the hearts and by the residents of the border area.
minds of citizens the necessity for proper respect Moreover; the simplification of the procedures
traditional law and to let them stand against contraband. and creation of a system which allows fewer contacts
Educating the society about the proclamations, between the staff and the traders was implemented by
regulations, directives and operational systems of some countries, while others upgraded information
customs using various media and customs website technology system and even introduced custom
awakens the people to stand up for their country. software to improve service delivery, increase
Also; to reduce the size of smuggling in the transparency and shorten customs clearance time. In
country it is necessary to strengthen the deterrence their reforms, Countries like Uganda and Peru on the
mechanism for committing the crime. In Ethiopia, sub other hand employed measures such as cooperation
article 1 of article 92 stipulated in proclamation no.622/ with other authorities, private entities and police,
2009 any person who, in contravention of this expanded audits and preventative inspections to
proclamation or the other laws enforced by ERCA, increase enforcement. Though these efforts may have
including regulations and directives issued there under, reduced the clearance time, increased seizures
imports or exports prohibited or restricted goods or (especially in Mozambique) and a decline in smuggling,
without customs clearance or illegally imports dully corruption is still high (especially in developing
exported goods, without prejudice to the forfeiture of the countries), which compromises these efforts.
goods and equipments used in the commission of the The World Bank findings show that political
offence and the proceeds thereof, be punishable with support for customs reforms is essential, together with
fine equivalent to the amount of the customs duties and
taxes payable on the goods and with rigorous 4
Proclamations No.622/2009, Customs Proclamation.
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stable leadership. Financial support is also a very different experts is used to know the extent of the
important ingredient in ensuring successful contraband effect.
restructuring. Also, the cooperation of customs staff, This study used only primary data obtained
taxpayers, and coordination with other tax agencies is from revenue authority employees and contraband
critical for effective customs reform (World Bank, 2005). business operators. The study used only primary data
The literature furthermore points several because of the illegal nature of the area of investigation,
initiatives that may help to combat illicit trade, including: lack of formal records about the revenues of the
 Exchange and joint analysis of statistics of general operators and actual revenue loss of government
trends of the risks and seizure of illegal and because of this informal business (contraband).
undeclared goods. Primary data were collected through structured
 Enhance cooperation between Customs and questionnaires that contain both open and closed-
different players in the economy, including other law ended questions distributed to the employees and
business operators. Also; Lickert scale was used to
2018
enforcement agencies, to help to better infiltrate and
identify production and distribution networks for generate the perception of various study respondents
Year
illegal and illicit trade. on the magnitude of contraband. Secondary data were
 Exchange of knowledge and experience by customs collected through reviewing written documents, articles
officials regionally and internationally. and journals. 43
 Establish and designate as appropriate national 3.3 Sampling Design
coordination agencies or bodies and institutional The target population of this study was tax
infrastructure responsible for policy guidance, authority employees and formal business operators as
research and monitoring of efforts to prevent, well as those illicit traders. Segen Area Peoples Zone
combat and eradicate illicit trade. was composed of five Woredas (Konso, Dirashe,
 Introduce modernized systems, improved risk Amharo, Burji, and Ali). Accordingly, the study utilized all
management practices, and implement audits of the data obtained from the employees of the revenue
custodians of regulatory controls. authority and contraband business operators. The tax
One measure has been the establishment of authority offices were located in Zone city and Zone
simplified trade regimes, which simplify the rules and center in addition to five Woredas.
procedures for small traders and provide tax incentives Collecting enough data from the targeted
for trading within the formal sector. Some countries population is essential for the realization of the research
cater expressly for the needs of small-scale traders at objectives and to arrive at the needed conclusion. The
their borders, by providing information officers to assist area of investigation lacks formal records about revenue
with the correct procedures. Equally, these economic and expense, operates outside the official system of
communities promote engagement with informal cross- operation and mysterious in number to select the
border trade representatives, to ensure their needs are representative sample for the study. Also; they may
considered when policies and legislation are perceive divulging them for the government for
developed 5. punishment at the time the researcher met them and
might refuse to give the data hence their business
3. Research Methodology was informal by nature. Therefore; the researcher picked
50 contraband business operators using judgmental
3.1 Research Design
sampling technique considering the ability to fill the
The study was descriptive, describing the effect
questionnaire properly, uniformity of their business
of contraband on government revenue of Segen Area
and their objectives of preferring illegal business than
People’s Zone. This is because it depicts the
formal business.
participants in accurately and allows insight into life
The total numbers of employees in revenue
experiences due to its unique approach.
authority are known so; the researcher used simple
3.2 Data Source and Collection Methods random sampling. Currently, there are about 178
The core objective of this study was to numbers of employees in the zone tax authority (35 in
investigate the effect of contraband on government Konso, 31 in Amharo, 25 in Gidole, 15 in Ali, 22 in Burji,
revenue of Segen Area people’s zone. Contraband is 16 in Segen city and 34 in Zone center). Using simple
informal business operating outside the formal rule and random sampling technique, the researcher took 75
regulation and has no legal records, so it is difficult to numbers of employees (15 from Konso, Amharo and
measure the amount of revenue loosed by the Zone city, 10 from Burji and Gidole. The remaining ten
government through contraband. An estimate made by were from Ali and Segen city).
3.4 Data Analysis
5
https://www.trademarkea.com/news/east-africa-has-a-lesson-for-sadc- After collecting all necessary data from
in-formalising-cross-border-trade/ respondents; they were examined for detection of
errors and omissions through careful scrutiny of the questionnaire were quantifiable, so were organized
completed questionnaires and put into a limited systematically and analyzed statistically with statistical
number of categories. The data collected through software (SPSS 20.0).
4. Data Analysis and Presentation

4.1 Demographic characteristics of the respondents
Table 1: Demographic Characteristics of Employees
Frequency Percent Valid Percent Cumulative Percent
Male 48 64 64 64
Gender Female 27 36 36 100
Total 75 100 100
Certificate 13 17.3 17.3 17.3
2018
Diploma 29 38.7 38.7 56

Year
Educational Level BA 30 40 40 96
Masters 3 4 4 100
44 Total 75 100 100
Accounting 31 41.3 41.3 41.3
Management 27 36 36 77.3
Field of Study Economics 14 18.7 18.7 96
Other 3 4 4 100
Total 75 100 100
less than 2 years 10 13.3 13.3 13.3
2-5 years 34 45.3 45.3 58.7
Work Experience 5-10 years 24 32 32 90.7
Above 10 years 7 9.3 9.3 100
Total 75 100 100
Source: Survey (2018)
Table 1 above presents the demographic against the rules and regulations that govern the export
characteristics of the revenue authority employees used and import activities of the countries. Different methods
to collect data for the study. As was seen from the table, are being designed to cut this illegal business, but
the majority of the participants were male and also instead of dimensioning it is raising and even attracting
diploma and first-degree holders. This has its own effect many young generations including those which are in
on contraband controlling process. Holding the high formal business sectors. Individuals may be involved for
number of employees that have a lower educational the suck of their benefit or serve other on commission
level or completed their education through distance bases. The motivating factors are various among the
process will affect the revenue of the zone negatively. participants like personal financial problems, increasing
Not only can this but from the table one can also family responsibility or even lack of a formal job as a
conclude that the majority of the selected employees source of income and other. The following table
were accountant and management field of study. More presents the factors that motivate peoples to engage
over; the table reveals that the selected employees have themselves in illegal business activities. Moreover; other
a work experience of between two to ten years. joins it as a response to overly cumbersome, rigid, time-
consuming and inefficient bureaucratic export/import
4.2 Factors Motivating Peoples to Engage in Contraband
procedures and regulations.
Contraband activities are illegal business
activities violating the law of the country or performed
Table 2: Why are you Engaged in Contraband
Valid Cumulative
Frequency Percent
Percent Percent
Lack of job 16 32.0 32.0 32.0
Lack of capital to start up my own business 3 6.0 6.0 38.0
Valid Lack of formal source of income to meet my family responsibilities 21 42.0 42.0 80.0
Demand-supply gap in formal system 10 20.0 20.0 100.0
Total 50 100.0 100.0
As shown in Table 2 above, people are being responsibilities (42%). Rise in family number and
forced by lack of formal income to meet their family expenses for consumption from time to time with
© 2018
1 Global Journals
decreasing or zero income pushes the family member The respondents were also asked who has led
into activities that will help them to get income for their them into contraband activities as shown in Table 3. The
families expenses particularly contraband. From the table reveals that the majority of the contrabandists were
table, 32% stated that they are being motivated by lack directed by their situations (64%) which may be lack of
of the job that will serve as a source of income. We are income, job or increasing family responsibility, and other
in situations where young generations stop their schools personal problems. On the other hand friend initiation
early because of family support or graduates wait for the also plays a big role in moving individuals into
hands of government all raising the level of the contraband as was shown in the table (30%). By looking
unemployment rate of the country. So this group has a and comparing the revenue that the friend in illegal
high probability of participating in contraband activities. business sector is generating with the revenue that
Moreover; the demand and supply gap in formal sectors he/she is obtaining in formal business sector discourage
also pushed individuals (20%) into informal sector them to leave that formal sector and join informal
(contraband). If the formal system cannot meet the business sectors or friend pushes to form informal
2018
demand of the people in the formal system, it is clear partnership business or advise them about the benefits
Year
that that gap will be filled by informal sectors through that they and other are getting by involving themselves
products smuggled illegally into the country. in contraband business.
45
Table 3: Who lead you in to contraband business
My own personal situations 32 64.0 64.0 64.0
My families push 3 6.0 6.0 70.0
Valid
My friend’s initiation 15 30.0 30.0 100.0
Total 50 100.0 100.0
4.3 Knowledge of the Respondents about Contraband Contrabandists run their business violating the
The awareness or knowledge that one has law of the country may be by knowing of about the
about any activity that he/she wants to do has effect on existence of the business outside the government
its outcome. Business peoples usually conduct SWOT regulation or unknowingly. They merely run it by looking
analysis before direct starting the business. On the other their benefit, but they did not analysis the effect that it
hand, there are people who engage themselves in a has on the society and the economy of the country at
business or other transactions unknowingly or without large. Accordingly, the response of the respondents
the idea about the cost and benefit of that activity. There about their knowledge regarding the illegality of their
are also other who start a trade activities by looking at business is presented in Table 4:
the success of other people or do it because other have
done it before and became successful in it. The same is
true in case of contraband.
Table 4: Do you know that the business you are involved in is illegal
Yes 17 34.0 34.0 34.0
Valid No 33 66.0 66.0 100.0
Total 50 100.0 100.0
From the above table the response, the majority ways. For instance, it enables people to meet the
of the contraband operators indicates lack of knowledge education, housing, and other basic needs, employs
about the existence of their business outside the rule people in their home countries and in the countries
and regulation of the country. They are running it as a where they source their goods and it is also a
normal business like formal operators, but they did not supplementary source of family income to people who
have awareness about the illegality of their business and are under-employed. It also benefits consumers through
its effect on formal business operators and other locally lower prices of the informally imported products. Table 5
produced products and even innovations. and 6 below show the results of the contrabandist
regarding the benefits of their informal business.
4.4 Benefits and Effects of Contraband
Although contraband exists outside formal
system, it benefits the economy of a country in various
Table 5: Do you think that contraband activities are important for the economy of a country
Yes 41 82.0 82.0 82.0
Valid No 9 18.0 18.0 100.0
Total 50 100.0 100.0
According to the result of the table, their were also asked in what way illegal activity can benefit
business has a contribution or benefits the economy of the economy of the country.
the country (82%). In line with the above response, they
Table 6: If your answer to question No 17 above was yes, then in what way can it benefit the economy
of the country?
2018

Year
It enables small entrepreneurs to

18 36.0 36.0 36.0
escape poverty
46 It allows us to meet the education,
15 30.0 30.0 66.0
housing and other basic needs
It acts as a supplementary source of

Valid 10 20.0 20.0 86.0
family income
It act as a source of employment to
5 10.0 10.0 96.0
some people who were retrenched
2 4.0 4.0 100.0
Total 50 100.0 100.0
The benefit of the contraband business regulation has harmful effects as well starting from the
according to the operators, through giving ability for the expansion of crimes to going down in government
operators and small entrepreneurs to escape poverty revenue to distortion of the formal economy of the
(36%), also allows others who have no formal source of country. It even promotes anti-social behavior and
income to meet the education, housing and other basic violation of the rules and norms in the formal economy
needs for their families (30%) and even acts as a and also regarded as the cause of low GDP growth.
supplementary source of family income to people who Such illicit activities also have benefits to society in the
are paid low salary (20%). form of employment, a source of income, and as a
The illicit transactions that is being conducted in means to escape poverty.
the country outside the formal system or government
Table 7: Effect of Contraband
Employee Perception
Mean SD
Statement SA A N D SD
Undermines government tax revenues 88% 12% 0% 0% 0% 1.12 .327
Increases tax burden on formal business operators 48% 29% 21% 2% 0% 1.76 0.836
Discourage formal operators 39% 40% 8% 8% 5% 2.01 1.133
Distorts competition in the market 18% 42% 21% 10% 9% 2.53 1.178
Foster the development of additional criminal activities 10% 12% 64% 8% 6% 2.85 0.911
Undermines investment, innovation and distribution 37% 42% 21% 0% 0% 1.84 0.754
Foreign currency loose 53% 22% 10% 9% 6% 1.89 1.203
Creates unfair competition for official traders 40% 37% 14% 6% 3% 1.93 1.004
Table 7 above presents the effect of contraband on formal business operators as was shown on the table
and as was seen contraband undermines the (77%) with a mean and standard deviation of 1.76 and
government revenue the highest response (100%) with a 0.836 in such a way that two of them (contrabandist and
mean of 1.12 and standard deviation of 0.327 because formal business operators) are selling the products in
the operators are outside formal system and also are the same country for similar customers, but one is
difficult to be taxed. By allowing products illegally to paying tax on the returns, but the other one didn’t pay
enter the country and sold informally causes the tax. This expansion of nontax paying business lowers
government revenue to fall. It also increase tax burden revenue of the government, and in need of revenue to
© 2018
1 Global Journals
cover its expenditures, government tries to raise it without having state-issued permits, license or
through growth of tax bases or raising tax rate which will registration. They violate the law that governs the import
fall only on formal operators. This, also, may remove /export procedure and thus avoid the payment of all
official business operators from legal system to join applicable taxes for the importation or exportation of
informal nontax paying system (79%) with a mean of goods.
2.01 and standard deviation of 1.133. Because of the negative effect that it has on the
Moreover; hence contrabandists bring products economy of the country, revenue authority is framing
at a lower price with higher quality causes the local different means to stop it as much as possible. The
producers. The country in need of raising its economy prevention strategy involves a wide range of actors-
takes many measures to attract foreign investors and government, regional and local administrators, and the
also local investors to invest capital in different projects. society at large. The government has disbanded
As an investment made in developing country, the customs police and replaced them by federal police
products face big challenges in the market if there are who will work with regional and local administrators and
2018
quality products imported informally from the developed the community and even mended customs and tax laws.
Year
nation. This kills the need for the investments and According to the report, as a result of the active
innovations in the country as shown in the table (79%) participation of them in fighting against contraband, the
with a mean and standard deviation of 1.84 and 0.754. volume of contraband goods that enters has decreased. 47
Such illegal business also wipes out foreign currency The government starts to take serious measures
that a country may earn from formal import-export by removing the existing government regulatory bodies
activities (77%) with a mean and standard deviation of assigned to control contraband and even amend the
1.89 and 1.203 and also can create unfair competition in rules that govern that activity. The government takes
the market (79%). such actions because that illicit activity was growing
from time to time negatively affecting the tax revenue of
4.5 Contraband Controlling and Challenges Faced in
the country. Accordingly, the controlling process to
the Controlling Process
some extent was effective in decreasing the volume of
Contraband goods have no official entry point in
the contraband products entering the country. The
Ethiopia, do not have customs document or prior
response of the contrabandist was presented in Table 8
approval to enter into or depart from the country
whether they have ever caught by the government
according to ERCA report. The smuggler’s traffic goods
or not.
of various kinds into and out of the country illegally
Table 8: Have you ever caught by government bodies who are assigned to control contraband
Yes 23 46.0 46.0 46.0
Valid No 27 54.0 54.0 100.0
Total 50 100.0 100.0
Source: (2018)
The result of the contrabandist for this study which are assigned for that illegal activity. The result
shows that 54% have never been caught by the shows that their products were confiscated by the
controlling units where as 46% were trapped by the controlling units 44%. In addition, 48% stated that
controlling unit. From this one can conclude that the nothing was happened to them (see Table 9). This
controlling process was to some extent not effective. group may be caught by government unit, but they may
The contrabandist operators who have been have methods that they are using to escape
caught by controlling unit were asked about what confiscation or penalty.
happens if they were trapped by the government units
Table 9: What was happening to you after being caught by government bodies
My products were confiscated 22 50.0 50.0 50.0
I have been penalized 4 28.0 28.0 78.0
Valid
Nothing was happen to me 24 22.0 22.0 100.0
Total 50 100.0 100.0
The contraband operators have many ways that contrabandist. The majority of the respondents stated
they can use to escape confiscation or penalties. They that they had escaped confiscation or penalty (62%)
are expert in bribing government bodies who use public shown table 10 below.
power for personal gains and can support the
Table 10: Have you ever escaped confiscation or penalty after being caught by government bodies
Yes 31 62.0 62.0 62.0
Valid No 19 38.0 38.0 100.0
Total 50 100.0 100.0
The groups from the respondents that escape confiscation as well as penalty were asked how they are
dodging and their answers were presented in table 11.
Table 11: How Did You Escape
I bribe controlling units 25 50.0 50.0 50.0
2018
I give them the most expensive products that

18 36.0 36.0 86.0
Year
they want from the contraband

I promised them to bring the products that
7 14.0 14.0 100.0
48 they want from abroad
Total 50 100.0 100.0

As was revealed in the table, the majority of the expensive products, the tax authority employees were
respondents (50%) stated that their main means of also asked about the challenges that the tax authority is
escaping confiscation and penalty is bribery. They are facing in dealing with contraband. The existence of the
running a large amount of capital so instead of losing business outside the government regulation by its
that hug amount of money they prefer paying a bribe for nature was hard to control for the controlling authority.
the controlling units informally. They have the ability to They have no formal license for that business, inter the
pay and also how to pay, so after paying the area, they border illegally, and sold illegally without government
carry the products publicly without any fear. In addition permission. This and other problems associated with
to this, they offer them the most expensive products that that illicit business makes the controlling process
they lacked the ability to buying on the legal market. By difficult. Table 12 provides responds to the tax authority
giving them those products that the controlling units employees regarding the challenges associated with
need, they can escape controlling point easily. controlling contraband.
In addition to the above problem in controlling
contraband process i.e. bribe and provision of
4.6 Challenges in controlling contraband
Table 12: Challenges in dealing with contraband
Employee Perception
Mean SD
Insufficient enforcement and penalties 26% 68% 6% 0% 0% 1.77 .535
Lack of ongoing training on how to control contraband 56% 32% 8% 4% 0% 1.60 .805
Weak institutional capacity 12% 38% 22% 16% 12% 2.79 1.21
Lack of competent and skilled man power in control unit 65% 26% 4% 5% 0% 1.47 .759
Insufficient checkpoints to control all cross border activities 20% 12% 54% 14% 0% 2.65 .966
Lack of adequate modern technological instruments and infrastructure 16% 24% 33% 20% 7% 2.77 1.16
Poor working conditions 8% 20% 28% 42% 2% 3.11 1.02
Poor salary for controlling units 68% 30% 2% 0% 0% 1.33 .502
Extensive informal sector in the economy 11% 10% 46% 23% 10% 3.16 1.10
Ineffective respond to tax evasion 27% 43% 28% 2% 9% 2.07 .811
Large and poor border 11% 20% 48% 11% 10% 2.91 1.08
Complex geographical transportation 12% 22% 43% 21% 0% 2.72 .952
Poor coordination within the authority 40% 12% 34% 13% 1% 2.23 1.16
Corruption and coalition 62% 24% 12% 2% 0% 1.53 .811
Hence the issue that was being tried to control with the general public. Opposite to this however, the
was the challenging one so need a well trained skilled obstacle in controlling process was insufficient human
and committed employees that work in collaboration resource that have skill and competent (91%) with a
© 2018
1 Global Journals
mean of 1.47 and standard deviation of 0.759. The academicians at many periods, but the issue was
products are entering the border illegally with no fixed continued to grow instead of diminishing. To protect
ways. The contrabandist changes the ways every time their country from negative outcomes of that activity and
so needs ongoing training about how to mitigate that even to secure their tax revenue continuously, it is
illegal activity. Reverse to this, there was no ongoing necessary for governments to reduce the effect. Ethiopia
training (94%) with mean and standard deviation of 1.77 like other African countries is affected by contraband
and 0.535. trade, so the government has taken many measures like
banning the existing government units assigned on that
4.7 Measures to Reduce Contraband
area, create awareness for the general public, amending
Contraband business in a given country has
tax and customs laws, enhancing public education and
different socio-economic, political and cultural effects. It
enlightenment, allowing border trade and other.
was explored by policy developers as well as
Table 13: Measures to wipe out or reduce contraband
2018
Employee Perception
Year
Mean SD
Create conducive environment for effective coordination and
50% 34% 8% 8% 0% 1.8 0.959 49
communication among controlling unit and the general public
Human resource capacity development 58% 40% 2% 0% 0% 1.43 0.524
Strong enforcement of the rules and punishments 42% 48% 6% 4% 0% 1.69 0.716
Strengthen domestic innovations and manufacturing to fill
55% 36% 9% 0% 0% 1.55 0.664
demand supply gap
Introduce and enhance information technology infrastructure 12% 21% 55% 8% 4% 2.69 0.90
Contraband business is to some extent the of job (32%) and the demand and supply gap in the
result of the demand and supply gap in the formal formal sectors (20%). According to the result, the
system. The official business operators in a country like selected contrabandists were led into such activity by
Ethiopia provide products with low quality. This supply their situations (64%) and friend initiation (30%).
gap pushes not only those who are not participating in The majority of the contraband operators have
authorized business, but also those that have business no knowledge about the existence of their business
to fill that gap. It is so essential for a government to raise outside government regulation. They are running it as a
domestic innovations and manufacturing as was seen in normal business like legal operators, but they did not
the above table (91%) and human resource capacity have awareness about the illegality of their business and
development (98%) with a mean of 1.55 and standard its effect on formal operators and other locally produced
deviation of 0.55. In addition to this, according to the products and even innovations. Accordingly, their
response of the official’s poor enforcements and business will support the economy through giving the
implementation of the existing rules and regulations ability for the operators and small entrepreneurs to
expand illegal activities, so it is better for the tax escape poverty, allows other who have no formal source
authority to strengthen strong enforcement of the rules of income to meet the education, housing and other
and punishments (88%). Even more; the tax authority basic needs for their families and even acts as a
with federal police officers cannot mitigate that illegal supplementary source of family income to people who
activity unless they collaboratively work with the general are under employed. It directly undermines the
public. They must create a conducive environment for government revenue, increase the tax burden on official
effective coordination and communication among business operators and may remove formal business
controlling unit and the general public (84%). operators from formal system to join the informal nontax
paying system. Moreover; kills the need for the
5. Conclusion investments and innovations in the country, wipes out
The objective of this paper was to assess the foreign currency that a country may earn from formal
effect that contraband business has on government import-export and also create unfair competition in the
revenue of the Segen Area People Zone. Contraband market.
incorporates those transactions from which the The process of controlling contraband faces a
operators generate huge amount of returns but pay no great challenge like the bribe, insufficient skilled, and
tax for the government. Some of factors push or competent human resource, lack of ongoing trainings,
motivates peoples to engage in such illegal activity low salary of the workers, corruption, and coalition,
according to the result of the study like lack of formal inadequate enforcement and penalties and ineffective
income to meet their family responsibilities (42%), lack respond to tax evasion in the area. According to the

result of the study, it is so better for a government to 14. Eukeria Mashiri and Favourate Y Sebele-Mpofu,
raise domestic innovations and manufacturing and Illicit trade, economic growth and the role of
human resource capacity development. In addition to Customs: a literature review, International Network
this, it should also strengthen strong enforcement of the of Customs Universities, Volume 9, Number 2.
rules and punishments and even create the conducive
environment for effective coordination and
communication among controlling unit and the general
public.
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imports. Bulletin of the Oxford University Institute of
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Policies, Enforcement, and Customs Evasion:
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1 Global Journals

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Global Journal of Management and Business Research: B

Economics and Commerce

The Effect of Contraband on Government Revenue: Case of

government revenue and the economy at large. So this

electronics and electrical goods, garments of various

The word contraband refers to property that is 2.2 Determinants of Contraband

© 2018 Global Journals

4. Data Analysis and Presentation

Diploma 29 38.7 38.7 56

Frequency Percent Valid Percent Cumulative Percent

It enables small entrepreneurs to

It acts as a supplementary source of

I give them the most expensive products that

they want from the contraband

Source: Survey (2018)

© 2018 Global Journals

References Références Referencias

Goods Smuggling in Iran. International Journal of

2. Bhagwati, J. (1964): On the under invoicing of

around the World: Evidence from a Structural

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