FIA uncovers tax evasion incidents worth P78 million

The Financial Intelligence Agency (FIA) says it uncovered tax evasion by businesses totaling P78.6 million between January and June 2024.

The findings are contained in the FIA’s latest Trends Report, which analyzes patterns in suspicious transactions and offers insight into financial behavior, transaction methods and emerging trends.

Under the Financial Intelligence Act of 2025, the agency is authorised to receive reports from designated entities and accountable institutions.

These include Suspicious Transaction Reports, Cash Transaction Reports, Cross-Border Cash Transaction Reports, International Funds Transfer Reports and Electronic Funds Transfer Reports, among others.

Such reports, according to the FIA, include Suspicious Transactions Reports, Cash Transactions Reports, Cross Border Cash Transactions Reports, International Funds Transfers Reports and Electronic Funds Transfers, etc.

According to FIA, tax evasion is mainly done through the business owners depositing revenue into their personal accounts to avoid tax examination by the Botswana Revenue Unified Service (BURS).

FIA reported a total of 66 Suspicious Transaction Reports (STRs) in line with the tax evasion financial crime aspect.

FIA researchers have found that Zimbabweans were mainly involved in tax evasion, accounting for about P30.8 million, followed by Batswana with P22.4 million and Chinese business owners with P14.3 million .

The report also reflects that STRs linked to tax evasion had the largest value of almost P78.7 million. It is followed by externalisation amounting to P30.11 million and fraud with P14.03 million, respectively.

“Tax evasion is the illegal act of deliberately avoiding taxes owed to the government. This is done by individuals, businesses, or organizations through deceptive practices.”

The fraud, according to FIA, is committed through a number of modus operandi that include the use of personal accounts for business transactions, externalisation , Cash deposit and sudden outflow and fraud, etc.

For example, FIA noted that under using personal accounts for business transactions, adults aged between 36 and 37 years who are business owners deposit revenue into personal accounts to avoid tax scrutiny.

“ Externalisation of funds refer to the illegal or unethical transfer of capital from one Country to another. In Francistown, several Chinese-owned companies have been suspected of externalizing funds, particularly in the retail business.”

Gaborone Hotspot

Meanwhile, FIA said Gaborone alone accounts for over 71 percent of tax evasion, Francistown is the major hotspot for funds externalization, responsible for almost 90 percent of the total.

It also said Gaborone has the highest fraud cases, contributing over 81 percent, it also leads in illegal deposit taking with over 68 percent of the reported cases and Gaborone also remains the biggest hotspot for money laundering.

“Gaborone is the epicentre of financial crimes and other places like Mogoditshane , Palapye and Molepolole show significant but much lower financial crime cases,” the FIA trend report discovered.

“Another key insight is that Thebephatshwa had illegal deposit taking of about P439 896.91.”

In addition, FIA said June 2024 recorded the highest tax evasion value of about P34 million.

It indicated that externalisation is the second largest category, accounting for 21.10 percent of the total STRs, the value peaks in June at about P15 million.