Trade misinvoicing in South Africa from 2010 to 2014 caused average losses of revenue to the government of approximately US$7.4 billion per year according to a new study by the Washington based non-profit research and lobbying organisation focused on illicit financial flows, Global Financial Integrity (GFI).

According to its report entitled South Africa: Potential Revenue Losses Associated with Trade Misinvoicing, this amount can be divided into component parts: uncollected value-added tax (US$2.1 billion), customs duties (US$596 million), and corporate income tax (US$2.1 billion). Lost revenue due to misinvoiced exports was US$2.6 billion on average each year, which is related to lower than expected corporate income taxes.


The report analyses South Africa’s bilateral trade statistics for the five-year period 2010 – 2014 using information from United Nations Comtrade and data made available by the South African Revenue Authority.

The detailed breakdown of bilateral South African trade flows allowed for the computation of trade value gaps that are the basis for trade misinvoicing estimates.

Import and export gaps

Import gaps represent the difference between the value of goods South Africa reports having imported from its partner countries and the corresponding export reports by South Africa’s trading partners.

Export gaps represent the difference in value between what South Africa reports as having exported and what its partners report as imported.

GFI’s report, South Africa: Potential Revenue Losses Associated with Trade Misinvoicing can be found here.