EINNEWS, November 29—A major aid organization is accusing the world’s second largest brewing company of using tax havens to avoid paying taxes in African and Asian countries where it earns large profits.
ActionAid International, a South African-based charity that serves 25 million people in 40 separate nations, has leveled the tax-dodging charge against SABMiller, brewers of Miller, Grolsch, Peroni and other beers.
ActionAid’s report accuses SABMiller of avoiding about tens of millions of dollars in taxes each year to India and various African countries. The company immediately denied the charge and said it was based on “a number of flawed assumptions.”
In its detailed overview of SABMiller’s activities, ActionAid said the company avoids paying its share of taxes through a variety of tax avoidance strategies, including overpaying costs to a Dutch subsidiary for “royalty use,” paying generous “management fees” to a Swiss subsidiary, and centralizing purchasing through Mauritius—all countries which require little in the way of taxes on SABMiller operations.
SABMiller declared profits of nearly $3 billion in 2009. But during the past two years it has declared a loss in its Ghana operations, and it has paid corporation tax to that country in only one of the four years from 2007-2010.
Martin Hearson, ActionAid’s tax specialist and co-author of the report, said: “Outrageously, SABMiller’s subsidiaries in Ghana and India have been operating income tax-free because of the company’s use of tax havens. Tax authorities in developing countries are fighting hard to stop tax dodging but the reality is they are locked in a David and Goliath-style battle with multinational companies. International standards governing the taxation of big business are stacked against them.”
SABMiller said in a statement that the company “does not engage in aggressive tax planning in any part of its operations and the report includes a number of flawed assumptions.”
“SABMiller companies pay a significant level of tax,” it said. “Compliance with tax laws underpins all of our corporate governance practices. We actively engage with revenue authorities and we are open and transparent with our affairs,” it added.
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