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How can governments reduce the prevalence of cross-border tax fraud? This paper argues that the use of digital technologies offers an opportunity to reduce fraud and increase government revenue. Using data on intra-EU and world trade transactions, we present evidence that (i) cross-border trade tax fraud is non-trivial and prevalent in many countries; (ii) such fraud can be alleviated by the use of digital technologies at the border; and (iii) potential revenue gains of digitalization from reducing trade fraud could be substantial. Halving the distance to the digitalization frontier could raise revenues by over 1.5 percent of GDP in low-income developing countries.

Business and Economics --- Exports and Imports --- Taxation --- Industries: Information Technololgy --- Fiscal Policies and Behavior of Economic Agents: General --- Tax Evasion and Avoidance --- Innovation --- Research and Development --- Technological Change --- Intellectual Property Rights: General --- 'Panel Data Models --- Spatio-temporal Models' --- Technological Change: Choices and Consequences --- Diffusion Processes --- Business Taxes and Subsidies --- Trade Policy --- International Trade Organizations --- Trade: General --- Information technology industries --- Public finance & taxation --- International economics --- Digitalization --- Value-added tax --- Tariffs --- Imports --- Tax evasion --- Technology --- Taxes --- Revenue administration --- International trade --- Information technology --- Spendings tax --- Tariff --- Estonia, Republic of

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This analysis of the extent of trade integration of sub-Saharan African (SSA) countries in the global economy as well as within the region over the 1995–2013 period focuses on four key concepts: (1) trade openness, captured by import and export flows; (2) the centrality in the global and regional trade network, a measure that takes into account not only the size of trade but also the number of trade partners and the respective weight of these trade partners in global trade; (3) gravity model estimates that account for country- and region-specific determinants of bilateral trade flows; and (4) global value chain (GVC) integration. Using both existing data and a newly available dataset based on multiregion input and output tables, this analysis led to several findings: (1) trade openness has increased strongly; (2) integration in the global economy has made the region more vulnerable to external shocks; (3) levels of trade flows emanating from sub-Saharan Africa are still only half the magnitude of those experienced elsewhere in the world; (4) the region still has ways to go to better integrate in GVCs; and (5) it is more critical than ever to make progress in filling the infrastructure gap by lowering tariff and nontariff barriers, improving the business climate and access to credit, and continuing to enhance education outcomes.

Customs unions --- Economic development --- Africa, Sub-Saharan --- Economic integration. --- Development, Economic --- Economic growth --- Growth, Economic --- Economic policy --- Economics --- Statics and dynamics (Social sciences) --- Development economics --- Resource curse --- Free trade areas --- Tariff unions --- Commercial policy --- International economic integration --- Second best, Theory of --- Tariff --- Africa, Black --- Africa, Subsaharan --- Africa, Tropical --- Africa South of the Sahara --- Black Africa --- Sub-Sahara Africa --- Sub-Saharan Africa --- Subsahara Africa --- Subsaharan Africa --- Tropical Africa --- Exports and Imports --- Taxation --- Globalization --- Trade: General --- Empirical Studies of Trade --- Trade Policy --- International Trade Organizations --- Globalization: General --- International economics --- Public finance & taxation --- Exports --- Trade balance --- Regional trade --- Global value chains --- Tariffs --- International trade --- Taxes --- Balance of trade --- South Africa