In 2016, British American Tobacco (BAT) shifted nearly $1 billion out of its global operation and into a single UK office where it paid almost no tax.
Tobacco companies have made a lot of noise about being important tax contributors in developing countries, but research conducted by the Tax Justice Network tells a very different story: for every dollar BAT paid in tax in the countries it operates in, the giant multinational shifted more than half a dollar that would have been taxed locally to a UK subsidiary.
If business continues as usual, Kenya, Bangladesh, Indonesia, Kenya, Guyana, Brazil and Trinidad and Tobago together stand to lose a total of over $718 million in tax revenue by 2030 from the financial manoeuvring of just one tobacco company.
Alex Cobham, chief executive at the Tax Justice Network, said:
“Tobacco companies make a lot of noise about paying tax, but the nearly $1 billion that British American Tobacco shifted out of developing countries in a single year into one UK office – and the life-changing tax it avoided on that profit – tells a very different story.
“Cigarettes not only impose massive human costs, those who profit from them are actively depriving lower-income countries of the public funding they need to provide people with health services. At a minimum, governments must require tobacco companies to publish country by country reporting to make sure profits are taxed in the communities where they were raised, not in the tax havens they were syphoned off to.”
This report reveals the range of mechanisms used by BAT to shift its pre-tax profits from the developing world where public funding is urgently needed to tax havens.
This Tax Justice Network report was supported by the Campaign for
The Campaign for Tobacco-Free Kids is calling on governments to take action immediately to stem the flow of much-needed funds from their countries by an industry already exacting a heavy toll of over 7 million lives lost each year to tobacco use. Take part in the campaign here to make sure decision-makers know you support an investigation of British American Tobacco!