Ashes to Ashes: How British American Tobacco Avoids Taxes in Low and Middle Income Countries

This report by the Tax Justice Network shows that for every dollar British American Tobacco (BAT) paid in tax in the countries where it operates, it moved more than half a dollar (that would have been taxed locally) to a U.K. subsidiary where it paid almost no tax. It estimates that Bangladesh, Brazil, Indonesia, Kenya, Guyana, and Trinidad and Tobago together stand to lose nearly USD $700 million in tax revenue by 2030 as a result. In 2016, by moving income equivalent to over 12% (USD $941 million) of its pre-tax profits to BAT Holdings Ltd, a U.K.-based subsidiary, BAT paid almost no corporate income tax. By charging itself royalties, rerouting loans through tax havens and paying interest fees on loans made between regional offices, BAT shrunk its tax contributions in low- and middle-income countries where public funding is in high demand but in short supply.

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