Monday, 15 April 2013

Stealing Africa, Zambia - Why Poverty?

Export value of copper $3 billion,

Tax revenue towards Zambia $50 million,

Zambia has to pay the electricity bill $150 million. WTH?

Transfer pricing : Basically shift your profits out of the high taxing countries, the onshore countries where the profits are actually being made and shift them artificially into low tax countries where taxes are low/tax havens.

Method: Multinational groups have subsidiaries all around the world and these subsidiaries trade with each other and they can artificially manipulate the prices of these trades for book-keeping purposes, for accounting purposes. The tax haven subsidiary will buy something cheaply and sell it much more expensively and between that gap, there is a huge profit and they won’t be taxed in the tax haven. Nicholas Shacxon

OCED : Organisation for Economic Co-operation and Development

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