Calling Time - ActionAid

Across the Indian Ocean, it is striking that
SABMiller’s two main operations in India, SABMiller
Breweries Ltd and SkOL Breweries Ltd, paid
no corporate income tax in the last financial
year. 73 Operating profits were swallowed up in
management fees equal to between 3.3% and
3.8% of turnover paid to a Dutch management
company. In return, says SABMiller, assistance in
technical, procurement and personnel matters is
provided. 74 Oddly, though, neither the company
earning the fees, SABMiller Management (IN)
BV, nor the other Dutch company that SABMiller
says is at the centre of technical service provision,
SABMiller Management BV, has any staff. 75 When
ActionAid visited the registered office of these
companies in Rotterdam (also the registered
address of 12 other SABMiller subsidiaries and
150 companies in total), the receptionist told us
that SABMiller had just 10 staff there, and that the
office deals not with the management services
listed by SABMiller, but with “managing the brands”.
The company told us that SABMiller Management
BV “has no need for employees as it procures
the necessary expertise when needed”. 77 How it
does even this without any staff is another
question altogether.
Applying the same method as our Ghana
calculations across Africa and India suggests
annual management fee payments such as these
to tax havens of £47 million, and a tax cost to the
governments affected estimated at £9.5 million
(see Table 1).
26 Calling time
The office in Zug, Switzerland, through
which payments from Africa are routed.
PHOTO: MARTIN HEARSON/ACTIONAID
tax dodGe 3:
taKe a trip to mauritius
How would you ship goods from South Africa to
Ghana? Ask a school geography student and you
would hope to be told to turn right from the Cape
and head up Africa’s west coast. Ask a tax planner
and he would tell you to make sure you send the
paperwork in the opposite direction. In this third
type of dodge, goods are procured by Accra
Brewery from another SABMiller subsidiary in
Mauritius, 7,000km away in the Indian Ocean.
Sensible commercial reasons – including
economies of scale and the management of
currency and commodity price risks – lie behind
the centralisation of SABMiller’s purchasing
across Africa. And unsurprisingly for a group
with its origins and regional hub in South Africa,
for a long time this was done using a South African
company, Sabex.
Then in 2008 the group created a new company
called Mubex, located 3,000km from SABMiller’s
Johannesburg regional office, in Mauritius. 78 Tax
– and specifically Mauritius’ maximum effective
tax rate for a ‘global business’ company of 3% –
must surely have been one reason for locating the
operation there. 79
The company says that, “There are... sound
commercial reasons for why regionalised
procurement may be based in a particular
jurisdiction... Aggregating certain procurement