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AFRICA: SABMiller denies tax avoidance claims

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SABMiller has strongly denied a claim that it uses subsidiaries in 'tax havens' to avoid paying millions of pounds in tax on its beer operations in Africa.

The ActionAid charity has accused SABMiller of "avoiding" paying up to GBP20m (US$31m) in taxes across Africa and India annually. In a detailed report on the brewer's tax strategy, published today (29 November), ActionAid said that the Peroni Nastro Azzurro brewer is "playing the system to avoid paying its fair share of tax in developing countries".

However, SABMiller strongly denied the charity's allegations. "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," the brewer said.

"SABMiller is a major direct investor, employer and tax payer in Africa, and our economic contribution to the continent is substantial," said the group. It added that it paid total taxes, including corporate tax, excise tax, value added tax and employee tax, of US$7bn globally in its last fiscal year, to the end of March. This payment, SABMiller said, was seven times the total amount paid to its own shareholders for the year.

However, ActionAid accused the group of employing a range of avoidance techniques, including paying "management fees" from African brewing businesses to subsidiaries based in low-tax jurisdictions, such as Zug in Switzerland.

"Grolsch drinkers are entitled to expect better from a company that claims to be committed to sustainable development,” said the report's co-author, Martin Henderson.    

SABMiller said: "Compliance with tax laws underpins all of our corporate governance practices. We actively engage with revenue authorities and we are open and transparent with our affairs." The brewer invested US$500m in its Africa operations last year.

"SABMiller supports ActionAid’s recommendations regarding improved management of taxation in developing countries, including greater investment in the capability of local tax authorities and that business should be taxed fairly," the brewer said.

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