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The Financial Intelligence Centre (FIC) says suspected tax evasion remained the predominant predicate offence in 2025, accounting for 580 of the 786 intelligence reports it disseminated to law enforcement agencies.
The findings are contained in the FIC’s 11th Money Laundering Trends Report for 2025.
According to the report, the Centre disseminated 786 intelligence reports in 2025, compared with 951 in 2024, representing a 17.4 percent decline.
Of the reports disseminated, 580 involved suspected tax evasion, 192 related to suspected money laundering, while 12 concerned other predicate offences, including corruption and fraud.
The Centre said suspected tax crimes were largely linked to shell companies. Its analysis identified substantial funds credited to such entities through domestic and international transfers, as well as unusually large cash deposits made by foreign nationals.
The funds were subsequently withdrawn in cash or transferred abroad to entities based in Asia under the pretext of importing goods, the report said.
Common red flags included failure to register for tax, under-declaration of income, the use of shell companies and the mixing of business and personal funds.
In a case study involving suspected procurement corruption, money laundering and tax evasion, the FIC analysed transactions involving Company A, described as a shell company that was awarded a contract by Public Institution A.
The company received K85 million between October 2024 and July 2025 before transferring about K70 million to Company B, retaining minimal balances in a pattern the report described as consistent with pass-through activity.
The inquiry established that Company B was linked to several high-value public contracts despite having operated for a relatively short period. These included a vehicle supply contract valued at about K150 million.
The report said Company B was primarily a shell company used to obtain a public contract.
On corruption, the 2025 National Risk Assessment rated the money laundering threat associated with corruption as medium-high, an improvement from the very-high rating in the previous assessment.
However, the report said corruption remained prevalent in the public sector, particularly in health, education and construction.
During the period under review, the FIC disseminated six cases involving suspected corruption and associated money laundering, down from 10 in 2024.
The cases largely involved suspected manipulation of public procurement processes, abuse of public office, misappropriation of public funds and the payment of suspected kickbacks.
“Corruption remains a significant financial crime threat with adverse effects on public finances, governance and delivery of essential public services as it facilitates diversion of public resources for private benefit and distorts procurement,” the report said.
On environmental crime, the report said illegal harvesting and exportation of high-value hardwood species, including rosewood, commonly known as mukula, as well as ivory trafficking, had persisted despite monitoring efforts.
It attributed the continued offences partly to the abuse of the fine mechanism under Section 100 of the Forests Act.
The report said smuggling networks operated mainly through cross-border routes, using falsified documents and fraudulent permits.
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Its analysis indicated that timber harvesting was concentrated in Eastern and Western provinces, with foreign nationals allegedly orchestrating the activities while Zambian nationals were used to transport illicit products.
In 2025, the FIC analysed 19 reports relating to illegal timber harvesting and exportation, as well as ivory trafficking. The cases revealed what the report described as a structured supply chain involving foreign financiers, local transporters and agents.
On fraud, the report noted that the second National Risk Assessment had identified the offence as a major source of criminal proceeds. However, only three fraud-related cases were disseminated in 2025, a figure the report said did not reflect the scale of the threat identified in the assessment.
The report said the impact of intelligence disseminated by the FIC was reflected in subsequent enforcement and revenue outcomes.
The Zambia Revenue Authority raised tax assessments exceeding K12.5 billion, inclusive of penalties and interest, while law enforcement agencies secured eight convictions relating to possession of proceeds of crime and abuse of office.
The convictions resulted in the forfeiture of assets valued at US$3.3 million, the report said.
The FIC also identified an estimated US$1.8 billion in suspected illicit financial flows in 2025, down from US$3.5 billion in 2024.
Meanwhile, advance income tax collected on remittances amounted to K485.1 million during the year.
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