A British company is the latest major multinational that stands accused of massive tax avoidance and depriving one of the world’s poorest countries of billions of dollars.<\/p>\n
The Zambian subsidiary of Associated British Foods has confirmed it paid virtually no tax in the past five years.<\/p>\n
A report by ActionAid states the company’s revenue from its Zambian operation is being funneled into tax havens including Ireland, Mauritius and the Netherlands.<\/p>\n
The report says that Zambia Sugar generated profits of $123m since 2007, but paid less than half a percent in corporate tax. It estimates that Zambian public services lost $27m as a result of the tax avoidance – enough to put 48,000 children through school.<\/p>\n
The report also said revenue lost to tax havens was 14 times the amount the UK gives Zambia in aid to combat hunger and food insecurity.<\/p>\n
Associated British Foods’ subsidiary company in Zambia issued this statement:<\/p>\n
“We deny emphatically that Illovo is engaged in anything illegal, immoral or in any way designed to reduce the tax rightly payable to the Zambian government.”<\/p>\n
Meanwhile, UK-based charity Christian Aid is also fighting what it calls a global culture of financial secrecy, through its Trace the Tax campaign.<\/p>\n
The group says it calculates that tax avoidance is costing poor countries $160bn a year. And for every $10 given in aid to the developing world, $15 is lost through tax dodging.<\/p>\n