LONDON Feb 10 Associated British Foods
denied any "illegal or immoral" activities aimed at avoiding tax
after an international charity said the British firm had moved
profits out of Zambia to reduce its tax bill.
ActionAid said Zambia Sugar, a unit of FTSE 100 company AB
Foods, had made profits of $123 million since 2007 but had paid
"virtually no corporate tax" in Zambia.
It also said in a report entitled 'Sweet Nothings' that the
owner of the Twinings tea and Silver Spoon sugar brands had
found legal ways to move $83.7 million, or a third of the unit's
pre-tax profits, out of Zambia to avoid tax.
AB Foods said in a statement on its website on Sunday that
its Zambian unit "denies emphatically that it is engaged in
anything illegal, immoral or in any way designed to reduce the
tax rightly payable to the Zambian government."
The UK company, which also owns clothing retailer Primark,
said it does not engage in aggressive tax planning in Zambia.
"the group has an open and transparent relationship with all
the tax authorities in the jurisdictions in which it operates,"
the statement said.
For the year ending 31 March 2012, the unit's effective tax
rate was 30.3 percent according to AB Foods. The group has paid
120 million pounds ($190.04 million) in taxes over the last five
years and collected another 180 million pounds in employment and
sales taxes, it said.
ActionAid responded by saying it was standing by its report.
"None of (AB Foods') arguments seem to stack up or tell the
whole story," said Chris Jordan on Sunday, a co-author of the
report which concluded a year-long investigation.
Tax avoidance by corporations legally channeling profits
between international subsidiaries, a mechanism known as
transfer pricing, has become a hot political issue with firms
like Starbucks, Google and Amazon
facing protests and political pressure.