Are multinationals in Ghana really paying less in tax than market traders?
It is unfair to criticise companies for not paying corporation tax without making it clear that they are paying millions of dollars in other forms of taxation
A recent campaign by the charity Action Aid draws attention to the plight of market traders in Africa who apparently pay more in tax than the huge multinationals located next to their humble market stores.
I contacted Action Aid to find out more. One of the examples they gave me was of Marta Luttgrodt, a Ghanaian market trader who pays £47 a year in corporation to the government, unlike British multi-national Brewer SABMiller, which allegedly pays nothing at all.
Outrageous? I contacted SAB to get their side of the story. They were happy to admit to not paying corporation tax - because their business only just broke even. However their accounts show that they actually did pay around $12million in excise duty and other taxes. In addition, they employ a large number of Ghanaians who spend their money in the local economy thereby creating further employment and taxes for the government.
A few years ago, on a visit to Uganda, officials told me that the one thing they desperately wanted was not more aid hand-outs from Western countries, but western multi-nationals investing money and providing skilled jobs - in other words, companies like SABMiller.
The mining company, Glencore were also singled out as paying less in corporation tax than another trader.
I haven’t yet had a chance to check this out but I would hazard a guess that Glencore pay more in taxes of one sort of another than the market trader they are being compared with.
I am sure Action Aid, like most western charities who give out money in Africa, are a well-meaning bunch. I am sure their clever adverts will pull in lots of subscriptions from angry Westerners.
But it is unfair to criticise companies for not paying corporation tax without making it clear that they are paying millions of dollars in other forms of taxation.
I can’t help but wonder how much tax Action Aid pay to the Ghanaian government and how many local people they employ.
I have asked them and I look forward to being able to make a fair judgement as to whether they are contributing more or less, overall, than the multinationals who they so clearly despise.
David Davies MP is the Member of UK Parliament for Monmouth. He also serves as a Special Constable for the British Transport Police
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