Determinants of expanision contraband trade in ethiopia: acase study on erca located in jimma branch

Abstract

Globally, governments' major revenues, and the countries' peace and security, are challenged by the increasing nature of illegal border trade. Customs and border control agencies face key challenges in preventing illicit trade and disrupting transnational smuggling operations those challenges: the scale of complexity of physical transportation geography in border, evasion, structural and operational flexibility by professional smugglers and cooperation problems which may arise inland and border control. The illegal trade in smuggled goods deprives governments of tax revenue, when goods are conveyed secretly or illicitly into or out of the country, without the payment of customs duty and tax. The government is obliged to increase taxes due to the burden of covering these shortages falls on honest taxpayers becomes weaken, the growth of black-markets, increase the price of domestically produced and imported goods leads many consumers seek lower-priced goods.This study sought to find out the challenges of control contraband trade on Ethiopian revenue and customs authority Jimma branch. The study used a qualitative and quantitative research approaches and targeted all population of 94 employees those who are working in law and enforcement department of the organization by use census of the whole respondents. The primary data was collected from custom profession by questionnaires developed in Linkert scale and interview to the management team. The data was tested by applying Statistical package for social science version 20 analytical tools. Cronbach’s alpha reliability test, frequencies, descriptive statistics, bivariate correlation analysis (two-tailed) to show the relationship, liner regression to measure the effects of the independent variables on the dependent variables and to find the coefficient of determination analysis to test the models. The process of controlling contraband faces a great challenge like corruption, Lack of formal trade agreement, lack of stability of Ethiopia and neighboring country, poor communication, inadequate enforcement and penalties in the area. The thesis then suggests that to mitigate contraband, the government should raise domestic innovations, manufacturing and development stability, strengthen strong enforcement of the rules and punishments, and even create conducive environment for effective coordination and communication among controlling unit.