ZRA Cracks Down on Shell Companies in K100 Billion Illicit Flow Scheme
The Zambia Revenue Authority (ZRA) has wrapped up investigations into 326 cases of suspected illicit financial flows (IFFs), a massive surge from only 17 cases in 2023. Of these, 240 are linked to shell companies entities that exist on paper but are often used to launder money and dodge taxes.
ZRA Director of Investigations Patience Siame revealed the figures during a high-level Tax Symposium organized in partnership with the Centre for Trade Policy and Development (CTPD). Siame described the situation as a growing threat to Zambia’s economic integrity and a clear sign of sophisticated abuse within the business environment.
“In just two years, we’ve traced over USD $5 billion in illicit flows. These are not isolated cases they are well-organized schemes exploiting gaps in tax and financial systems,” Siame said. “It’s a wake-up call to tighten oversight and enforce transparency.”
To close the loopholes, ZRA has rolled out a suite of digital tools aimed at modernizing tax enforcement. These include mandatory electronic tax clearance certificates for all international money transfers, as well as a tracking system for import and export proceeds to monitor compliance more effectively.
A cornerstone of this digital shift is smart invoicing, a system designed to detect invoice manipulation one of the most common tactics used in tax evasion. By leveraging these technologies, ZRA aims to increase real-time oversight and reduce fraudulent reporting.
ZRA Commissioner General Dingani Banda emphasized that data and technology are now central to tax administration. “We are using advanced analytics to identify patterns, streamline processes, and improve accuracy,” he said. “Our goal is to boost revenue collection while ensuring fairness in the system.”
Banda reiterated the Authority’s 2025 target of collecting K156 billion in domestic revenue, stressing that broadening the tax base especially within the private sector is essential. “Every kwacha recovered from illicit flows represents money that can fund schools, hospitals, and roads,” he said.
CTPD Board Chairperson Brian Mwiinga commended ZRA for opening the space for civic engagement and dialogue with the business community. “Tax policy must not be developed in isolation. Businesses and civil society must both be part of shaping an inclusive and accountable system,” Mwiinga said.
As Zambia intensifies its fight against corporate tax abuse, the message to the business sector is clear: compliance, transparency, and cooperation are no longer optional they are the new standard for doing business in a digitally driven economy.
May 12, 2025
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