Associated British Foods emphatically denies allegations in Zambia Sugar tax avoidance

A spokesman said:

“We deny emphatically that Illovo 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.

Since 2008 Illovo has invested £150 million to double the production capacity in Zambia and so create the largest sugar mill in Africa. This mill and related activities provide employment for more than 5,000 people.

Capital allowances on this investment have resulted in no corporate tax being payable since the investment was made. The availability of these allowances, used by governments all over the world, has nothing to do with tax avoidance. African governments should be as free as any other to attract investors.

Payments made by Zambia Sugar for the services of third party contractors, expatriate personnel in Zambia and export services provided by Illovo, are made at cost. As a result there is no artificial reduction in profit in Zambia Sugar. These payments are made to overseas companies, largely for historical reasons, and are not driven by tax considerations. ActionAid could not be more mistaken.

We have responded in a transparent and detailed manner to ActionAid and despite this they have produced a report written in inflammatory language that is designed to mislead.”

For further information please contact:

Citigate Dewe Rogerson

Chris Barrie / Nicola Swift
Tel: 020 7638 9571
Mobile: 07968 727289