Trade Mispricing - Do Countries Fetch the Rightful Value on Exports?

This publication explores the issue of trade mispricing, focusing on the manipulation of export values and its impact on economies. It highlights the challenges faced by African countries in fetching accurate values for their exports, leading to losses in tax revenue. Trade mispricing involves deliberate misstatement of prices of goods and services to conceal money in other jurisdictions, evade taxes, and engage in illicit financial flows. The publication examines how trade mispricing arises, including issues with commodity classifications and coding systems. It emphasizes the detrimental effects on foreign exchange earnings and tax revenues, citing examples from Tanzania and other countries.