ActionAid exposes SABMiller’s tax evasion

By Elise Montano | 3 December 2010, 15:37

UK-based brewer SABMiller, owner of brands such as Grolsch, is avoiding an estimated £20m of taxes in Africa and India every year. According to a report released this week by ActionAid this is enough money to educate a quarter of a million children in Africa.

The report, ‘Calling Time: Why SABMiller should stop dodging taxes in Africa’, reveals for the first time how the world’s second biggest brewer, uses a complex system of  tax havens to siphon money away from developing countries. This then  deprives those countries of significant amounts of tax revenue. The aggressive tax planning that SABMiller and other companies undertake to avoid paying their fair share of tax in developing countries deprives them of an estimated $160 US billion per year – more than the $120 US billion that Western governments spend annually for development aid.

SABMiller has responded by stating that their total tax contribution is just under $7,000 US million. But this is a classic trick used by companies to inflate their contribution. When measuring ‘total tax contribution’ companies calculate every single tax they can conceivably claim to be associated with their business, and claim these – including VAT paid by consumers of the companies’ products and employee income taxes!

Although this aggressive approach to tax planning that has been taken by companies like SABMiller is legal, simply complying with tax laws is not the same as taking a responsible attitude towards paying tax dues.

Companies such as SABMIller have developed a complex system of tax havens and transfer-pricing, hiding their business operations and tax planning behind a veil of secrecy that many countries are simply unable to tackle. In order to combat this businesses that are serious about sustainability need to take a stand on tax avoidance and:

1. Stop using tax havens to siphon profits out of developing countries;
2. Implement a tax code of conduct to explain how their sustainable development principles apply to their tax affairs;
3. Be more transparent, by publishing a basic set of accounts for every country in which they work – including tax havens.

Fairfood feels that tackling tax avoidance should be a top priority for a company that claims to be committed to sustainability. A responsible approach to tax planning is just as much taking the ethical option, as it is making sure that your product is not associated with child labour. Corporate Social Responsibility goes beyond just looking at environmental and labour issues – a reliable attitude towards paying one’s tax dues is also an essential part of it.

If you want to take action click here!

Elise Montano is Project Leader fairness issues analysis at Fairfood International.

Read more about Fairfood’s talks with SABMiller on our SABMiller page.