South Africa: Potential Revenue Losses Associated with Trade Misinvoicing

Nov 23, 2018 | Global Financial Integrity | Global Financial Integrity

This report analyzes South Africa’s bilateral trade statistics for 2010–2014 (the most recent years for which sufficient data are available) which are published by the United Nations (Comtrade). The detailed breakdown of bilateral South African trade flows allowed for the computation of trade value gaps that are the basis for trade misinvoicing estimates. Import gaps represent the difference between the value of goods South Africa reports having imported from its partner countries and the corresponding export reports by South Africa’s trade partners. Export gaps represent the difference in value between what South Africa reports as having exported and what its partners report as imported. Analysis of trade misinvoicing in South Africa from 2010—2014 shows that the potential loss of revenue to the government is $7.4 billion annually or, a total of $37 billion during the period. The study also examined trade data from the South African Revenue Service in order to conduct an in-depth examination of import under-invoicing.