E-Malt.com News article: World: SABMiller rejects ActionAid’s allegations of tax avoidance

World’s No. 2 brewer SABMiller strongly rejected on November, 26 the allegations made by ActionAid in its recent report on the group's tax affairs.

SABMiller does not engage in aggressive tax planning in any part of its operations, and the report includes a number of flawed and inaccurate assumptions, the company said in an official statement on its website.

“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. We follow all transfer pricing regulations within the countries in which we operate and the principles of the OECD guidelines,” the company said.

SABMiller is a major direct investor, employer and tax payer in Africa, and it estimates its economic contribution to the continent as substantial. In 2009/10 the beer giant invested more than US$500 million in Africa and further expanded its operations with new breweries or acquisitions in Tanzania, Mozambique, Nigeria, Ghana, Southern Sudan, Uganda and Ethiopia.

SABMiller companies pay a significant level of tax. In the year ended 31 March 2010, the group reported US$2,929 million in pre-tax profit and group revenue of US$26,350 million. During the same period the company’s total tax contribution remitted to governments, including corporate tax, excise tax, VAT and employee taxes, was just under US$7,000 million. Seven times that paid to shareholders. This amount is split between developed countries (23%) and developing countries (77%). In both Colombia and South Africa, SABMiller contributed over US$1,000 million in taxation to each respective government's revenues.

In the past ActionAid has made some constructive contributions to the debate on tax. SABMiller supports ActionAid's recommendations regarding improved management of taxation in developing countries, including greater investment in the capability of local tax authorities and that business should be taxed fairly. ActionAid's ‘Accounting for Poverty' report states: "Governments should aim to strike an optimal balance between raising revenue and attracting investment that benefits poor people when setting corporate tax rates and offering tax incentives." SABMiller said it agreed with ActionAid's position but does not believe that they undertook this particular piece of research in the same spirit.

A report published on November, 22 by ActionAid alleges the company, who makes Grolsch and Peroni Nastro Azzurro, avoids millions of pounds of tax in those economies by routing profits through tax-havens.

"[SABMiller] uses a complex system of tax havens to siphon profits out of subsidiaries in developing countries, depriving those governments of significant amounts of tax," ActionAid alleged in the report. The group avoids "an estimated GBP20 million of taxes in Africa and India every year - enough money to educate a quarter-of-a-million African children," it added.


01 December, 2010