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2019 Financial Intelligence Center Report Released

2019 Financial Intelligence Center Report Released

The 2019 Financial Intelligence Center (FIC) Report has been released, with details showing a reduction in tax evasion cases.

However, dissemination of proceeds of crime from corruption and tax evasion rose from K195 million in 2018 to K450 million in 2019.The decline in tax evasion cases has been attributed to increased implementation and enforcement of tax laws and regulations by the Zambia Revenue Authority (ZRA). “In 2019, ZRA assessed ZMW27.7 million as a result of the disseminations made by the Centre compared to ZMW62 million assessed in 2018,” FIC reports.

And during the period under review, the FIC disseminated six intelligence reports bordering on money laundering compared to twelve (12) in 2018, but the value of the disseminations increased from K195 million in 2018 to K450 million in 2019. FIC says the major predicate offences that contributed to the generation of proceeds of crime were tax evasion and corruption, with the trend observed that the proceeds of crime were invested in offshore centers, local property market and in business.On corruption, the report indicated that the Center received a total of eighteen (18) reports involving suspected corruption mostly perpetrated by individuals charged with authority.

It expressed concern that the Government continues to lose funds that are meant for the provision of public goods and services due to corruption. “It was observed that individuals used their positions in public institutions to influence the awarding of contracts to companies in exchange for gratification in the form of cash, real estate and motor vehicles. There were also a number of reports to the Center on suspected corruption that bordered specifically on fraud and/or bribery.

Public servants were the perpetrators who were paid in order to grant favours to business persons, especially foreign nationals,” FIC has stated.“One of the major sources of corruption continues to be single sourcing of projects which are non-competitive. The contraction of loans on these projects also attracts usury arrangement fees, in some instances up to 9 % of the amount of loan contracted. These fees are distributed between agents and persons responsible for the projects in public institutions. Projects under the Public Private Partnership (PPP) arrangements and loans contracted by quasi Government bodies from private entities are of particular concern.”

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