Glencore allegedly dodges taxes
Commodities trader Glencore International, which announced on Wednesday the price range for its planned initial public offering on the FTSE, is allegedly using dubious tax practices at its Zambian operations.
According to the United Kingdom’s Daily Mail, which has carried out a special investigation into the company, Glencore’s subsidiary, Mopani, located in Zambia, sells its copper at artificially low prices to its parent company in Switzerland. The copper can then be sold on by Glencore from Switzerland, where it not only realises a higher price, but where Glencore also pays lower taxes, according to the newspaper.
“The process of moving a commodity like this from one country to another to reduce a company’s tax bill runs contrary to the Organisation for Economic Cooperation and Development’s guidelines, which are designed to ensure proper international standards of business.
“While this method is not illegal, it deprives the people of Zambia of tax revenues which should rightly be theirs,” the Daily Mail states.
It adds that Glencore’s already favourable trading conditions in Zambia are the result of a deal made with former president Frederick Chiluba, who was found guilty in a London court in 2007 of stealing £23-million from his own people.—I-Net Bridge.