From: Nigerian Tribune
There has been an explosion in global and cross-border trade for some decades now. With this burst also comes the menace of illicit trade, otherwise known as the underground economy. As markets open and demand grows, people try to engage in illegitimate trade by producing, importing, exporting, purchasing or selling items without complying with relevant legislations. Illicit trade is a massive problem for manufacturers, governments, regulators and multilateral agencies and indeed any legitimate operator in the industry value chain. It extremely undermines government’s objectives on taxes and revenues, places burdens on government’s regulatory and enforcement agencies and undercuts the potential benefits of international trade. It is a source of worry for government because illicit trade merchants sabotage government and the economy by evading taxes and other statutory obligations. The huge infrastructure gap and challenging business climate in the country often makes it difficult for locally manufactured goods to compete favourably against imported goods. This problem is further exacerbated by the influx of contrabands into the nation’s market. Illicit trade deprives legitimate companies and manufacturers of the financial and moral incentive to contribute meaningfully to the formal economy, a situation that ultimately results in job losses and collapse of business. This is another reason for it to be tackled urgently.
