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Africa: SABMiller, Schtop Tax Dodging

ActionAid published a report on Monday exposing how international corporations dodge millions in taxes all over Africa. The report found that SABMiller has avoided paying an estimated £20m worth of tax. The money that African countries lose each year in taxes could put an extra 250,000 children in school.

ActionAid has built a campaign around the report, ‘Schtop’, to force SABMiller to be more accountable and transparent. The campaign calls for SABMiller to stop using tax havens, implement a tax code of conduct to explain how its sustainable development principles apply to its tax affairs and be more transparent. African countries mentioned in the report are Ghana, Zambia, Mozambique,Tanzania, South Africa.

SABMiller has refuted the allegations. Martin Hearson, Tax Campaign Policy Advisor at ActionAid, responds to SABMiller's statement saying, “SABMiller’s media team slammed our reporton their tax dodging in Africa on Friday – before they had even seen it.” He continues:

What they've said in their news item and blog post reads more like a kneejerk denial than a thoughtful response to some serious allegations and constructive recommendations. The company says that it “does not engage in aggressive tax planning in any part of its operations.”

ActionAid’s research is based on documentary evidence, some of which came from official sources and some of which was supplied by the company itself. We have also given the company a chance to correct our analysis. While SABMiller is vaguely implying that we made “flawed and inaccurate assumptions”, they seem unable to point to any of them specifically.

They have also also employed a classic trick – they point to their US$7,000 million ‘total tax contribution’ estimate, but this is inflated – less than a tenth of this amount represents taxes incurred by the company itself.

Keith says that what SABMiller does is immoral:

Another tax avoider is SABMiller. Who, is a reasonable response? SABMiller is the owner of Grolsch (the beer in the fancy bottles) and as Action Aid has exposed, they do not pay their taxes in Africa.

How little tax? its Ghanaian brewery manages to pay less tax per year than a local firm selling its beer at a food stall! SABMiller controls more than 30% of Ghana’s beer market, yet its operating profit there is a mere 0.69% of its income. Why? Because it ensures its ‘profits’ are recorded in low tax havens. As a result of this practice, the company paid no tax to Ghana for three of the last four years – a significant loss to a country where corporate income tax accounts for £1 of every £7 in the public purse.

SABMiller would argue that what they do is not illegal, though the jury is out on that one.Whether legal or not is beside the point, it is immoral.

Ellie Mae O’Hagan uses Ghana as an example to show how SABMIller avoids paying tax:

Like Vodafone, SABMiller employs bafflingly complex financial systems, from the use of tax havens to the shifting of money between its subsidiaries, all of which are remarkably efficient at preventing it from paying its fair share of tax to the countries in which it trades. And despite the company’s insistence that it does ‘not engage in aggressive tax planning,’ its Ghanaian brewery manages to pay less tax per year than a local firm selling its beer at a food stall.

To better understand SABMiller’s tax avoidance, let’s use Ghana to put its shenanigans in some sort of context. SABMiller controls more than 30% of Ghana’s beer market, yet its operating profit there is a mere 0.69% of its income. Why? According SABMiller, it is because revenue is hampered by ‘the intensely competitive nature of the local market, escalating input costs and a recent increase in excise tax.’

SABMIller Schtop tax dogding! Photo courtesy of ActionAid

Below are reaction from Zambian netizens following SABMiller/Zambian Breweries’ response to ActionAid’s report. Sharp Shooter says:

Mr. Chibamba [Chibamba Kanyama – Corporate Affairs Director (Zambian Breweries Plc)] with all due respect,the figures are to general.Such figures were suppose to be given by Corporate Affairs Director of SABMiller(the parent company of ZB).Now you as ZB corporate Affairs Director,you were suppose to avail how much ZB remits to the govt of Zambia.You cant be talking about other countries as if you are always on the ground witnessing the taxation process in different countries where SABMiller operates including Colombia.Just clear ZB of these allegations and how much is paid.

Mandingo says:

He most likely copied and pasted the article then put his name at bottom.

Abena Jimmy says:

I quote ”SABMiller does not engage in aggressive tax planning in any part of its operations…” Well tax planning is legal, so if SABMiller is not engaged in aggressive tax planning which is legal then what ???. Additionally, it is well know that world wide most companies that seem to work hand in hand with Tax authorities are the major tax evaders. Thats why i like the Italian tax system…never trust a company’s reported profit figure to base your tax on.

Follow Tax Justice Campaign tweets using #schtop and #SABMiller. Below are some of latest tweets on the subject:

Kateshay posts a link to a campaign video:

Quite hilarious video of us (@actionaidliz) outside #SABMiller demanding they #schtop tax dodging in bottle suits http://bit.ly/famNAs

There are lots of ways to get involved:

@jackstone36 there's lots more ways to get involved to make #SABMiller pay their taxes. Check out #ActionAid fb http://on.fb.me/ggDtmn

MyFairLady89 urges her followers to take action:

Take action and message #SABMiller http://forms.actionaid.org.uk/ea-campaign

ere's a full audio-visual account of our stunt at SABMiller yesterday.

You can read the full report here and take action by signing the letter to SABMiller chief executive to pay their taxes. You can find ActionAid on Twitter and Facebook. Here is ActionAid Tax Justice Campaign blog.

Finally, enjoy this video posted by Sarah Palmer of ActionAid stunt at SABMiller:

Here's a full audio-visual account of our stunt at SABMiller yesterday. Prepare your ears, painful singing and dodgy dutch accents coming up.

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