ABF strongly denied allegations by ActionAid, which said that ABF’s Zambian sugar-producing subsidiary had made profits of $123 million (91 million euros) in Zambia since 2007 but paid virtually no corporation tax.
ActionAid said in a report titled “Sweet Nothings” that Zambia Sugar had also used the tax system to legally move $83.7 million (62 millions euros) out of the country to tax havens including Ireland, Mauritius and the Netherlands.
“Tax avoidance by Associated British Foods in Zambia is helping to keep people locked in hunger,” said Chris Jordan, one of the authors of the ActionAid report, which followed a year-long investigation.
“We know that business can be a force for good in Africa, but this is massively undermined when a company doesn’t pay its fair share of tax.”
In a statement, London-headquartered ABF said 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.”
“We are very proud of Zambia Sugar and the major contribution that it makes to the Zambian economy,” it added.
ABF said Illovo, its African sugar-producing subsidiary of which Zambia Sugar is a part, had paid £120 million ($189 million, 141 million euros) in taxes over the last five years.
It said ActionAid’s report was a “highly inflammatory account of the company’s tax position that is incomplete at best and factually wrong in places.”
A series of global companies has been hit by mounting public anger in Britain at alleged tax avoidance by firms such as US-based coffee giant Starbucks, online retailer Amazon and Internet search giant Google.
Prime Minister David Cameron pledged at the World Economic Forum in Davos last month he would use Britain’s G8 chairmanship to counter tax avoidance and ensure that companies “pay their fair share.”