Africa’s tax men investigate SABMiller

ActionAid’s campaign against SABMiller struck target. After having been accused of tax dodging by the London charity ActionAid in November last year, the authorities in five African states have decided to work together to examine the brewer’s tax affairs. On 6 May 2011 SABMiller again rejected any claims of tax avoidance in Africa after officials from South Africa, Ghana, Zambia, Tanzania and Mauritius had come together in a South African-led African Tax Administrative Forum to look at the group’s tax payments.

The world’s number two brewer reiterated that it had not done anything wrong. Instead, it was a major direct investor, employer and taxpayer in Africa and in its financial year to end-March 2010 had invested more than USD 500 million in Africa on new breweries and acquisitions.

"We entirely refute ActionAid’s allegations that we do not pay our fair share of tax in Africa and would add that the report contains a number of flawed and inaccurate assumptions," said a SABMiller spokesperson.

ActionAid said tax authorities from the five nations will work together on the tax issues, while any resultant action would have to be taken by the individual countries.

It was reported that the investigation will focus on the brewer’s transfer pricing strategies which the charity said led to the avoidance of millions of pounds of taxes in Africa every year.

Whether the investigation will come up with anything dodgy in SABMiller’s accounts is another matter. For the campaigners it is important that the investigation keeps the issue on the boil as it points to the much larger problem of corporate taxation – and how to avoid it.