The compliance rate for income tax is about 85%. In Europe where they have the VAT tax the compliance rate is estimated between 85-95%. However google "cigarette tax cheating" to see how more than two people are willing to cheat. I think i read that one out of every six cigarettes is sold on the black market. Instead of just cigarettes being smuggled, everything could potentially be smuggled. Its not hard to imagine black markets being set up and the deaths of innocents when territory's are fought over.