Eurodad Member ActionAid have released a new report
The report examines the tax practices of one of the world’s largest food multinationals, the Associated British Foods (ABF) group, in one of the most impoverished places in which it operates. ABF produces staple brands like Silver Spoon sugar, Kingsmill bread, Ryvita and Patak’s, and also owns clothing chain Primark. The reports focuses on the activities of ABF’s Zambian subsidiary, Zambia Sugar Plc.
ActionAid's investigation found that Associated British Foods group's (ABF) Zambian subsidiary uses an array of transactions that have seen over a third of the company’s pre-tax profits – over US$13.8 million (ZK62 billion) a year – paid out of Zambia, into and via tax haven sister companies in Ireland, Mauritius and the Netherlands. Some of these transactions reduce Zambia Sugar’s taxable profits, while the structure of others avoids the Zambian taxes ordinarily levied on such foreign payments themselves. Thanks to this financial engineering, we estimate that Zambia has lost tax revenues of some US$17.7 million (ZK78 billion) since 2007.
This report shows how tackling the problem will require both national and international action across three fronts: companies’ ingenious financial engineering, weak international tax rules, and governments’ deliberate tax policies. While the group of companies detailed in this report have taken (lawful) advantage of loopholes in international tax laws, they have also benefited from tax breaks deliberately written into countries’ tax codes, responsibility for which ultimately lies with governments.
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