NGO report claims tax avoidance & tax incentives deprive Zambia of billions of dollars annually; cites Glencore, Vedanta, Associated British Foods as major culprits
A report by War on Want claims that generous tax incentives and tax dodging by multinational companies is depriving Zambia, one of the poorest countries in the world, of revenue that could support vital public services and anti-poverty programmes. The report, a response from Glencore previously obtained by Business and Human Rights Resurce Centre as well as a media statement by Vedanta are provided below. A statement previously issued by Associated British Food in response to accusations of tax avoidance in Zambia can be found here: https://business-humanrights.org/en/actionaid-report-into-tax-avoidance-...
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NGO report says corporate tax dodging deprives Zambia of $3 billion annually, impeding investment in health, education, etc.
Author: War on Want (UK)
'Extracting minerals, extracting wealth: how Zambia is losing $3 billion a year from corporate dodging', 21 Oct 2015: Zambia has abundant natural resources – including minerals and agriculture – yet gains little tax revenue from the extraction of its resources, leading to lost opportunities to invest in public services such…education and health which are essential in tackling poverty…[M]ultinationals…dodge paying their fair share of tax. In 2012 it was calculated that the amount avoided by companies…was around $2 billion a year – representing 10% of Zambia’s GDP. Looking at three companies…Glencore, Vedanta, and Associated British Foods, the report examines the details of such tax avoidance...[C]urrent attempts to write…global rules…for tax are taking place through the OECD…For Northern governments’ actions to be credible, they must stop supporting rules that enable…the continuing existence of tax havens. Multinationals must be held to account for their tax dodging and southern countries should be able to participate as equals in the development of international tax rules…[also refers to Zambeef]
Author: Lusaka Times
...Mr. Anil Agarwal, recently addressed businesspeople in India...In an anecdote, he referred to Vedanta’s 2004 acquisition of KCM...Unfortunately, one activist has taken a small part of the video of this speech and used it negatively out of context...Mr. Agarwal decided not to mention that since the acquisition, nearly all the returns from KCM have been reinvested back into KCM, as it simply wasn’t relevant to his anecdote. In fact, over nine years of ownership by Vedanta Resources, KCM has made $2.9 billion of capital investment and made just $73 million in dividend payments – a fifth of which is to the Zambian government...We are now Zambia’s largest employer and second biggest taxpayer. “We are very thankful to the local communities, and...to the government...and we remain fully committed to KCM and to helping the Zambian people and the Zambian nation develop and grow its natural resources.”
Commodities trader Glencore…has denied allegations of dubious tax practices… [T]he company's spokesman, Simon Buerk…[said] that the allegations were based on "an incomplete, draft desktop study that was circulated in Zambia several months ago". He added that Glencore had publicly refuted the draft "conclusions" of the document at the time…Dealing with allegations…that Glencore-owned operations had caused "sulphur clouds" to "hang low over Mufulira", Buerk said: "The Mufulira smelter was first built in 1937. Prior to privatisation, 100% of all the sulphur dioxide went into the atmosphere. "Since privatisation, we have invested in the improvement of the smelter's emissions standards as per a plan agreed by the Environmental Council of Zambia."
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