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British sugar giant 'denies emphatically' Zambian tax avoidance scheme

By James Barnes

11 February 2013 at 12:38 BST

Associated British Foods has today rejected allegations that it engaged in any illegal or immoral tax avoidance in Zambia, adding that it believes it has been 'wronged' through inaccurate accounts.

Zambia: ABF reject 'inaccurate' tax claims

The Telegraph reports that ABF, whose brands include Silver Spoon and Twinings Tea, made the defence following allegations made by anti-poverty charity Action Aid, which accused ABF’s Zambian sugar-producing subsidiary of avoiding tax in the country.


The charity had claimed that despite generating profits of $123 million in 2012, the subsidiary paid ‘virtually no corporate tax’, meaning Zambian public services lost out on around $27m.
However, ABF said the allegations are ’inaccurate’ and ‘highly inflammatory’.
ABF finance director John Bason said: ‘The reason that no corporate tax is paid in Zambia for the last couple of years is because of our £150m investment building the biggest sugar mill in the country. There are capital allowances available on that, in the same way similar reliefs are available to investors in most countries, including the UK.’

Tax havens

Mr Bason added that the allowance would run for up to another five years, after which the company would revert to Zambia’s 10 per cent rate of corporation tax
He said it was ‘absolutely not true’ that the ABF subsidiary was funnelling pre-tax profits to sister companies in tax havens. Payments were made to Ireland and Mauritius in return for the services of ‘real people, doing real jobs’, he said before adding: ‘We’ve been wronged.’


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