BANGLADESH INSTITUTE OF INTERNATIONAL AND STRATEGIC STUDIES

DEMYSTIFYING INTERNATIONAL INFORMAL TRADE WITHIN FORMAL TRADE: A CASE STUDY OF BANGLADESH

Author: S.M. Humayun Kabir, Muhammad Shahadat Hossain Siddiquee

DOI Link: https://www.doi.org/10.56888/BIISSj2019v40n1a4

ABSTRACT

General discussions on formal and informal trade do not reveal the actual scenario concerning informal trade within formal trade though a significant part of Bangladesh’s informal trade takes place through formal channels. This paper attempts to demystify such informal imports through the legitimate channels. Data collected from different entry points for the fiscal years (i.e., FY 2015-16 and 2016-17) have been analyzed using descriptive statistics for providing a fresh perspective in this regard. Findings reveal that importers show less import quantity or value and hide true description of commodities to evade duties and taxes. Some unscrupulous importers show higher and lower volume as lower and higher duty items respectively for dodging taxes. Money laundering in the name of import is also evident. The policy implication to reduce such illegitimate imports into Bangladesh is to put more emphasis on physical examination using non-intrusive scanning or examining tools at the import stage.