Nontariff barriers, trading companies and customs duties evasion

Enlinson Mattos and Rafael Bressan

No 560, Textos para discussão from FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil)

Abstract: This paper leverages an exogenous tariff reform in Brazil with rich administrative data to document the elasticity of customs duties evasion (ECDE) for the universe of importers in Brazil. We focus on the role of two modulators of ECDE: (i) nontariff barriers (NTB) and (ii) trading companies. Our findings are threefold. First, we estimate the elasticity of misreported imports to be larger than that in comparable literature. Controlling for misclassification, our results suggest an increase of 2.43% in evasion for each percentage point increase in tariff rate for missing values and 1.45% for missing quantities. Second, NTBs can reduce the elasticity of evasion up to 0.91 and -0.06, for value and quantity, respectively. This finding reinforces the NTB’s stricter enforcement role due to its papertrail. Third, we find no evidence that trading companies evade differently than other importers. Auditing policies and reputation concerns are investigated.

Date: 2022-12-19
New Economics Papers: this item is included in nep-acc, nep-int, nep-iue and nep-law
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fgv:eesptd:560

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