Problems of Doing Business and Tariff System, and their Impacts on Smuggled Goods

Smuggling is one of the many activities done in hidden and underground economy in Iran. Although the existence of smuggling must be traced in commerce and trade sectors, its impacts and consequences can be seen in all aspects of the national economy. The share and extent of institutions in informal economic sectors have a meaningful correlation with the complexity of business. In other words, in an inappropriate business situation, the businessmen are reluctant to do business in formal atmosphere. However, they turn their activities toward informal sectors. This will, consequently, limit formal activities of economic institutions while at the same time increase capital risk. Also this will decrease economic growth of the country. One of the best ways of struggle with smuggling, which is also preventive, is utilizing economic tools, especially removing business barriers. These barriers are tariff systems and complicated customs formalities, which are good motivations for the smugglers to pursue smuggling. In this study, the smuggled items discovered in the southern borderline region are identified and classified. Considering the meaningful correlation between each smuggled item with the problems it renders, the researchers made some suggestions as to how to lower motivation for smuggling and to allow tradesmen to enter a healthy economy.