Underinvoicing

Underinvoicing

The act or practice of stating the price of a good on an invoice as being less than the price actually paid. Underinvoicing occurs if the importer and/or exporter wish to reduce a tariff or if a buyer and/or seller wish to reduce their apparent profits so as to pay less in taxes. See also: Fraud.
References in periodicals archive ?
Our investigations indicate that at least 60 traders could be involved in over and underinvoicing of goods," special director, NIA, Anil Shukla said.
He said steps should be taken to address the issues of underinvoicing on Chinese imports.
He said, "Steps should be taken to address the issues of underinvoicing on Chinese imports.
There is no doubt that this overinvoicing and underinvoicing has involved the country (Nigeria), in huge foreign exchange drain and losses in revenue (4).
1997) Determinants of Underinvoicing of Imports in Pakistan.
The underinvoicing of imports and exports by Dominican businesses is a relatively common practice for those seeking to avoid taxes and customs fees.
This may be accomplished through acquiring loans, making salary payments, paying consulting fees, the use of false import/export invoices, overinvoicing and underinvoicing, real estate investment and investment in the securities markets.
I suspected underinvoicing of sales out of Kenya, and overinvoicing of expenses charged to Kenya, which both reduce taxable profit in Kenya.
By comparing the extent of misreporting on quantities versus values, we were further able to determine whether evasion occurred through underinvoicing quantities, prices, or relabeling high tariff goods as low tariff ones.
13) Countervaluation is done either by the underinvoicing or overinvoicing of product flows between these import/export businesses.
The objective of customs reforms is to discourage misdeclaration, underinvoicing and smuggling, which causes loss of billions of rupees to the country.