SABMiller rejects ActionAid allegations of tax evasion in Ghana

SABMiller Group, owners of Accra Brewery Limited says it strongly rejects allegations of tax evasion in Ghana and other parts of the developing world where it owns subsidiaries. 

In a widely publicized report released in London Monday November 29, 2010 by the civil society group ActionAid, the organization says the multinational giant SABMillier has turned its subsidiary in Ghana, Accra Brewery Limited into what “has become a textbook example of the techniques used by big business to avoid corporate income taxes.” An act described as “aggressive tax planning,” it said.

In the report titled “Calling Time: Why SABMiller should stop dodging taxes in Africa”, it says SABMiller has paid no income tax in the past two years, but transferred millions of pounds to sister companies in tax havens.
 The SABMiller group makes profits of over £2 billion a year, it adds.

According to ActionAid, it used published financial information, interviews with government officials and undercover research to find out how SABMiller avoids tax across Africa and India.

“The cost to the governments affected may be as much as £20 million per year,” the report said.

The report says SABMiller, which is the world’s second largest beer company, with interests across six continents has 65 tax haven companies, which allows it to use clever accounting to siphon profits from African and Indian companies to those tax havens. According to the report the act reduces SABMiller’s African corporation tax bill to an estimated fifth of what it should be paying.

However, in a press release in reaction to the report which has been sent to ghanabusinessnews.com, SABMiller says it strongly rejects 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,” it said.

The company insisted that compliance with tax laws underpins all of its 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,” it said.

According to SABMiller, its companies pay a significant level of tax.  In the year ended 31 March 2010, the group reported $2,929 million in pre-tax profit and group revenue of $26,350 million.

“During the same period our total tax contribution remitted to governments, including corporate tax, excise tax, VAT and employee taxes, was just under $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, we contributed over $1,000 million in taxation to each respective government’s revenues,” it added.

ActionAid however, insists that despite the fact that SABMiller subsidiary Accra Brewery is Ghana’s second-biggest beer producer, pumping out £29 million (Gh¢69 million) of beer a year, and rising,  in the past two years it has made a loss, and it paid corporation tax in only one of the four years from 2007 to 2010.

ghanabusinenessnews.com