Resource information
This paper uses mirror statistics and
research in the field to estimate the magnitude of
Tunisia's informal trade with Libya and Algeria. The
aim is to assess the scale of this trade and to evaluate the
amount lost in taxes and duties as a result as well as to
assess the local impact in terms of income generation. The
main findings show that within Tunisian trade as a whole,
informal trade accounts for only a small share (5 percent of
total imports). However, informal trade represents an
important part of the Tunisia's bilateral trade with
Libya and Algeria, accounting for more than half the
official trade with Libya and more than total official trade
with Algeria. The main reasons behind this large-scale
informal trade are differences in the levels of subsidies on
either side of the border as well as the varying tax
regimes. Tackling informal trade is not simply a question of
stepping up the number of controls and sanctions, because
differences in prices lead to informal trade (and to an
increase in corruption levels among border officials) even
in cases where the sanctions are severe. As local
populations depend on cross-border trade for income
generation, they worry about local authorities taking action
against cross-border trade. At the same time, customs
officials are concerned about the risk of local protests if
they strictly enforce the tariff regimes in place. This
issue will become even more significant if fuel prices in
Tunisia rise again as a result of a reduction in the levels
of domestic subsidies.
