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To avoid paying taxes and customs on the car, which can add up to quite a bit.

If the taxes are high enough to fund the development & operation of military-like boats, I think the problem isn't the smuggling but a greedy government. They can destroy this market overnight by just making the taxes more reasonable, and maybe even end up ahead if it means they no longer have to spend money on enforcement.

>greedy government ...just making the taxes more reasonable

Like Australia? Look a their bustling car manufacturing sector and all the jobs it created, or US and their electronics manufacturing might. Why make reasonable taxes when you can use protectionism to bootstrap whole industry? Sprinkle some mandatory 49-51% co ownership and you have a real winner on your hands.

Australia doesn’t have much of a car industry

There's a big enough market for stolen cars, that the tax level probably wouldn't make a difference.

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