Tax evasion

==Evasion of customs duty==
[[Customs duty|Customs duties]] are an important source of revenue in developing countries.{{Cn|date=November 2019}}{{Clarify|date=November 2019}} Importers attempt to evade customs duty by (a) under-invoicing and (b) misdeclaration of quantity and product-description. When there is [[Ad valorem tax|ad valorem]] import duty, the tax base can be reduced through under-invoicing. Misdeclaration of quantity is more relevant for products with specific duty. Production description is changed to match a [[Harmonized System|H. S. Code]] commensurate with a lower rate of duty.<ref name="ReferenceA" />{{better source|date=January 2015}}

===Smuggling===
[[Smuggling]] is import or export of products by illegal means.{{Cn|date=November 2019}} Smuggling is resorted to for total evasion of customs duties, as well as for the import and export of [[contraband]]. Smugglers do not pay duty since the transport is covert, so no customs declaration is made.<ref name="ReferenceA"/>{{better source|date=January 2015}}