Accra Brewery also reacts to ActionAid report on Ghana tax dodging
Officials of Accra Brewery Limited (ABL) the Ghana subsidiary of the British Brewer, SABMIller have also reacted to some specific allegations of tax dodging made against SABMiller by ActionAid in a widely circulated report.
ActionAid cited the operations of SABMiller in Ghana through its subsidiary, Accra Brewery Ltd.
The report which was released in London Monday November 29, by ActionAid and titled “Calling Time: Why SABMiller should stop dodging taxes in Africa” detailed what it says are SABMiller’s strategy to dodge taxes in Ghana.
ActionAid accused SABMiller of practicing aggressive tax policy, in which the company takes advantage of the loopholes in Ghana’s tax system to avoid paying taxes, and this ActionAid says has led to the loss of taxes to the tune of GH¢2.2 million. These actions according to ActionAid is not illegal but unethical.
SABMiller has issued a press statement in which it has rejected all the allegations saying it does not practice aggressive tax policy.
Ghanabusinessnews.com had done two stories on the matter. The first on Monday November 29, 2010 titled ‘SABMiller rejects ActionAid allegation of tax evasion in Ghana’ and a second one on Tuesday 30, 2010 titled ‘Ghana loses GH¢2.2m in revenue from SABMiller tax dodging – ActionAid’.
On Thursday December 2, 2010 ABL officials called ghanabusinessnews.com to respond to the second story.
Speaking on the phone, the Managing Director of ABL, Greg Metcalf said “We completely reject the report,” indicating that the report contains incorrect facts. Reiterating SABMiller’s earlier position, Metcalf said “we do not practice aggressive tax policy”, adding “it is not SABMiller’s policy to dodge taxes.”
In the report, ActionAid said it found that SABMiller used various tactics to evade taxes. Under what ActionAid calls Tax Dodge 1: Going Dutch, it says many of the local brands sold by SABMiller’s subsidiaries in developing countries are not owned by the country in which they were invented, and where they are brewed and consumed, but in the Netherlands.
It indicated that Rotterdam based SABMiller International BV owns African brands such as Castle, Stone and Chibuku – and takes advantage of a novel set of tax rules offered by the Netherlands that enables companies to pay next to no tax on the royalties they earn. SABMiller International BV has negotiated a deal with the Dutch revenue authority that is worth tens of millions of pounds in reduced taxes.
The six SABMiller companies in Africa paid this Dutch company £25 million in royalties last year, according to their most recent accounts. If the company’s African operations that do not publish accounts also make payments at the same rate, the total can be expected to be £43 million. This corresponds to an estimated tax loss to African countries of £10 million, ActionAid said.
But responding to this allegation, Metcalf said it is not true that the Dutch company owned all the brands mentioned by ActionAid. He said the only brand owned by the Dutch company is the Stone brand.
Among other allegations, ActionAid said SABMiller imported maize into Ghana when it could have bought from local farmers, but Metcalf denied that and said ABL does not import maize from outside Ghana. “We do not import maize at all. We do only when we can’t get maize to buy in Ghana.” According to him three years ago during the global food crisis was the only time that ABL had imported maize.
He said the company has always bought maize from a local company in Kumasi called Premium Foods.
On not paying taxes in the last three years, Metcalf said it was because the company was running at a loss. He said the company’s operating cost exceed its income. He said ABL’s operating cost has rising to GH¢8 million within the period.
He however said even though ABL paid various taxes to Ghana amounting to GH¢25 million last year, that has not been mentioned in the ActionAid report. He however said ABL has not paid bottom line corporate tax because it has been running at a loss. The management he said is working hard to turn that around.
By Emmanuel K. Dogbevi
blablabla, no one dodges tax and owns up to it. are we supposed to believe that SABMiller does not dodge taxes because Accra Brewery said so? please. Between ActionAid and SABMiller, one can bet his last penny on ActionAID for two very good reason – one, ActionAID is not a Ghanaian NGO so they do not have a parochial interest, secondly, ActionAID is has a record of ensuring ethics and accountability in businesses, whiles Multinationals like SABMiller are known for evading taxes in developing countries and siphoning money into their countries. Even the guys who work at Accra Brewery know this too well, so what is the blablabla about.