Associated British Foods (AB 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 US$123 million since 2007, but had paid “virtually no corporate tax” in Zambia.
It 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 US$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 Web site on Sunday 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 March 31 last year, the unit’s effective tax rate was 30.3 percent, according to AB Foods. The group has paid ￡120 million (US$190.04 million) in taxes over the past five years and collected another ￡180 million 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.