Haiti: Strengthening Customs Administration in an Insecure Environment

This report is motivated by three primary factors. First, customs administrations tend to continue to operate in crisis situations, contrary to other government services. Moreover, customs taxation is the simplest tax instrument to enforce during security crisis periods because it concerns traded goods, which are easier to tax than individuals or companies. Tax revenues in Haiti are low at 6.3 percent of GDP in FY23 and insufficient to provide adequate public services. As such, customs is the single largest source of domestic revenue and leakage in customs revenues is significant. Second, as noted, strengthened customs practices and applications have the potential to significantly strengthen the legitimacy of the State and build greater trust between the government and the citizenry, including better controlling transborder criminal activity. AGD has a high profile, and corruption, unfair treatment, and perceived ineffectiveness in the administration of customs practices is viewed as highly problematic by the citizenry. Third, the current insecure environment in Haiti, including the increasing gang presence and resultant personal security concerns, presents significant constraints and challenges in carrying out basic customs services and practices, not to mention meaningful reforms. AGD could benefit from lessons learned in other fragile, conflict-affected, and vulnerable settings (FCV) and better adapt to the current insecure environment.