Tax authorities in five African countries are to investigate giant brewer SAB Miller following an ActionAid report which found that the multinational avoided millions of pounds of taxes in Africa every year.
The African Tax Administration Forum will coordinate the groundbreaking investigation of the company’s transfer pricing strategies in South Africa, Ghana, Zambia, Tanzania and Mauritius.
Martin Hearson, one of the report’s authors, said: “This unprecedented initiative marks a new era in which rampant tax avoidance by multinationals in developing countries will come under much closer scrutiny, both from tax authorities and from campaigners. Tax avoidance by multinationals costs billions in lost revenues, which could transform healthcare and education services for millions of people.
“The outcome of the audit will be a litmus test of whether the global taxation rules are up to the task of preventing unscrupulous tax avoidance. By working together in this way, African countries will be able to build up their capacity to challenge big business. But if they are to be really effective in these efforts, the international tax rules must change to make it simpler for low-income countries to enforce them.”
The Tax Administration Forum’s investigation was revealed by Logan Wort, the organisation’s executive secretary, in remarks made at the Deloitte African Tax Summit in South Africa and reported by South African newspapers today.
ActionAid’s report, Calling time: why SABMiller should stop dodging taxes in Africa, revealed in November how SABMiller, the world’s second biggest brewer, uses a complex system of tax havens to siphon profits out of subsidiaries in developing countries, depriving those governments of significant amounts of tax - enough money to educate a quarter-of-a-million African children.
photo : ©Jane Hahn/ActionAid