ActionAid Exposes How SABMiller, Owner of Miller Beer, Dodges Taxes in Poor Countries
WASHINGTON, DC -- Giant multinational brewer SAB Miller – majority owner of American beer brands Miller and Coors – is dodging an estimated $31 million of taxes in Africa and India every year, enough money to educate a quarter-of-a-million African children, according to a new report released today by the anti-poverty group ActionAid.
The report, “Calling Time: Why SABMiller should stop dodging taxes in Africa,” reveals for the first time how the company uses a complex system of tax havens to siphon profits out of subsidiaries in developing countries, depriving these governments of significant amounts of tax.
Martin Hearson, a tax specialist at ActionAid and the co-author of the report, said: “SABMiller conducts its tax affairs behind a veil of secrecy. The company and its subsidiaries siphon money away from African countries and into tax havens in Europe, where the tax rates are far lower. SABMiller is playing the system to avoid paying its fair share of tax in developing countries.”
In Ghana, ActionAid found that SABMiller’s brewery has paid no corporation tax at all for the last two years.
“The most shocking part of this story is not the huge amounts of tax avoided, but the fact that one woman selling beer outside SABMiller’s brewery in Ghana paid more income tax last year than the multi-million dollar brewery,” continued Hearson.
“SABMiller should stop using tax havens to drain money out of Africa. Instead it should aim to become a market leader for tax justice.”
“We want to see a world in which developing countries need much less aid. This can’t happen unless they can raise their own revenue through taxation,” said Hearson.
Ghana, along with other developing countries, is trying to develop its tax system to fund essential services including schools and hospitals. The more money it can raise in tax, the less it needs to do to rely on aid to pay for public services. But while small businesses and traders are being brought into the tax system, big companies like SABMiller use their superior resources and multinational structures to find ways of avoiding tax.
One way in which SABMiller avoids tax is by holding valuable trademarks for African beers in Europe rather than in their country of origin. The cost of using the trademarks helps eat into the profits in the African subsidiary, so less tax is paid there.
Other ways of avoiding tax include paying “management fees”, mostly to Switzerland, and routing its procurement services via a subsidiary based in Mauritius.
ActionAid has launched a campaign demanding that SABMiller stop using tax havens. It says tackling tax avoidance should be a top priority for the company’s corporate responsibility programme.
ActionAid wants the company to make its tax affairs more transparent by publishing a basic set of accounts in every country in which it operates. ActionAid USA is calling on the Obama administration use its influence in the G20 so that all companies operating in developing countries are required to publish country-by-country accounts. This would act as a big deterrent as companies currently use tax havens in secrecy and with impunity.
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Contact: Neil Watkins +1 202 370-9919
Notes to editors
1. This story is about SABMiller’s tax avoidance activities, which are designed to comply with the letter of the law, not break it as in the case of tax evasion. We use the term interchangeably with ‘tax dodging’, to cover strategies which are legally permissible but which ActionAid regards as ethically questionable. There is no suggestion that SABMiller has broken the law by evading tax.
2. The full report can be found at www.actionaid.org.uk/schtop
3. The report was written by Martin Hearson of ActionAid UK and Richard Brooks, the UK based tax-inspector turned prize-winning investigative journalist behind the recent £6 billion Vodafone tax dodging scandal uncovered in Private Eye.
4. SABMiller has more companies in tax havens (65) than it has breweries and bottling plants in Africa. The tax havens used by SABMiller include Switzerland, the Netherlands and Mauritius.
5. ActionAid’s study found evidence of tax avoidance by SABMiller in Ghana, Mozambique, Tanzania, South Africa, Zambia and India.