Tax evasion involves taxpayers purposefully distorting the true value or quantity of goods traded to the tax authorities in order to reduce their tax liability. In trade, tax evasion includes misstatement of imports or exports in a bid to avoid tax liability by traders. The acts closely linked to tax evasion is trade mis-invoicing and mislabelling. Tax evasion is illegal and punishable by law. The fear of the punitive effect of the law forces traders to be involved in tax evasion secretly and makes it difficult to detect. The decision to evade tax is affected by the probability of being detected by the authorities, the magnitude of the penalty imposed on the offender as well as the wealth effect. If there is a low probability of detection that is compounded by a higher income return from evading tax, importers and exporters put a huge effort into evading tax. Consumers evade tax as a way of reducing the cost of importing commodities.