ILLEGAL trade, or what is simply termed as underground economy, has been on the increase in many parts of the world, as evidenced by transnational dealings that evade paying taxes.
According to some estimates, the illegal economy accounts for eight to 15 per cent of the world’s gross domestic product (GDP), exposing local economies to distortions and diminishing legitimate revenues.
This has the potential to fuel conflict as a result of the deteriorating social conditions. The grim reality is that revenue that could be used to build roads to facilitate commerce, hospitals to save lives, homes to raise and protect families, or schools to educate the young is lost to?kleptocrats, criminals, and terrorists with selfish interests.
This is the global scenario but zeroing in on Zambia, a measure of damage to the local economy through illicit trade is also a matter of growing concern.
For instance, the indiscriminate cutting of the Mukula tree, one of the most sought-after tree species and its subsequent sale in various volumes does not bring any earnings to State coffers but end in the hands of selfish individuals.
Hundreds of thousands of Kwacha are lost through Illicit Mukula trade activities that are not monitored, and this is a source of grave concern.
Illicit trade in cigarettes is another dimension to these activities and law-enforcers around the world are fighting to combat this and other illegal activities that tend to undermine genuinely-run?businesses.
Zambia lost around US$2.4 million in 2013 alone, because of illegal trade involving cigarettes.
The Zambia Revenue Authority (ZRA) investigations department of the Mobile Compliance Unit estimates that the loss in revenue earnings through illegal cigarette trade will surpass the 2013 figure by the end of this year.??Senior collector Nase Lungu said during the annual Anti-illicit Trade Conference in Cape Town, South Africa, at the weekend that illicit trade in cigarettes was not a victimless crime, denoting that not recognising the illegal sale of cigarettes as a crime was one of the serious challenges facing law-enforcement agencies in the country.
Despite the various steps introduced in dealing with illicit trade ventures, none would be effective without increased information sharing and joint operations with Customs officials from neighbouring countries.
The other challenge facing Zambia are permeable border areas which Mr Lungu said required cooperation at Government level, including the legitimate traders and cigarette manufacturers to stamp out the scourge.
Members of the public can also play a part in stamping out this particular crime by reporting to relevant authorities and, at the same time, they need to know that illicit trade such as that involving cigarettes which do not bear the ZRA tax stamp, constitutes a crime.
It is only through these efforts that Zambia will address this particular problem, otherwise more millions of dollars will continue to be lost.
As experts in this field indicate that the illegal economy obeys no laws except the law of the strong, the corrupt, and criminals.
From an economic perspective, all of these illicit activities divert money from the balance sheets of legitimate businesses and put cash in the hands of criminals, who build larger and larger illicit networks.
These networks threaten the stability of governments and the prosperity of economies.
National revenue and assets intended to finance the future are instead embezzled and stashed away for private gain, impairing the ability of communities and businesses to make the investments necessary to create resilient pathways for economic growth and give people hope for a brighter tomorrow.