African tax forum dissects SABMiller

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ActionAid, a global NGO that tackles poverty, has welcomed the decision by the African Tax Administration Forum to meet this month to discuss SABMiller’s tax profile in the four African countries in which it operates.

It believes the move marks the beginning of a period of greater scrutiny of the tax position of multinational companies operating in Africa.

The decision to discuss SABMiller at the forum meeting, which is to be held in Cape Town on June 28, appears to have been prompted by a critical report written by ActionAid, which was released last year. Martin Hearson, the author of the report, which accused SABMiller of depriving African countries and India of substantial amounts of tax income as a result of its aggressive tax management policies, has welcomed the meeting.

He said this meeting represented a positive step in attempting to redress the resource imbalance between powerful multinational companies and individual African countries. Hearson said it was very encouraging to see the effort that was being put into building capacity among the tax authorities in Africa.

“This will be the first time African countries are meeting to discuss one case… Given the imbalance of resources and power between the multinationals and individual tax authorities, it is very positive to see the tax authorities working together like this.”

He believed it would lead to “a very different environment in Africa. We will find tax avoidance and evasion will come under increasing scrutiny.”

A spokesman for SABMiller said that the company had not been invited to participate in the meeting and that the brewer was unsure as to whether or not it was going to be discussed during the meeting.

Forum executive secretary Logan Wort told the Wall Street Journal last week that the forum’s mission was to train and provide technical support to tax officials in member countries so they could plug tax “leakages”.

He said there was no witchhunt. “The meeting doesn’t mean action will be taken against SABMiller.” Wort was not available for comment.

Hearson welcomed calls for the Group of 20 (G20) countries to require improved disclosure by multinational companies listed in their jurisdictions. He said any company listed in one of the G20 countries should be required to disclose details of profits earned and tax paid in each country it operated in.

ActionAid’s report on SABMiller claimed the beer group’s tax avoidance measures cost four African countries and India as much as ?20 million (R217m) a year.

SABMiller rejected ActionAid’s allegations and said it did not engage in aggressive tax planning. Its shares fell 1 percent to R236 on Friday.