Paradise Papers: SA names aplenty in huge tax leak

High-profile South Africans linked to questionable practices, with Glencore, Standard Bank and Shanduka named

David Lewis, director of Corruption Watch and former chairman of the Competition Tribunal, says it is not illegal for South African companies to put money into places considered to be tax havens. “However, the problem is, some companies abuse this privilege by using it for transfer pricing, evading taxes and hiding transactions behind secrecy provisions.”

This leak — dubbed the Paradise Papers — highlights damning cases of tax abuse and questionable practices involving multinational companies, politicians, celebrities, wealthy executives and royals. It includes previously hidden details of corporate registries from countries infamous for ensuring high levels of secrecy.

New details of how global corporate giants including Apple, Nike and Uber avoided taxes through increasingly imaginative bookkeeping are flagged in the leak.

Of particular interest is the $70m loan facility from Standard Bank to Illovo Sugar.

That loan to Illovo Sugar, an issuer listed on the JSE until February 2016, was the subject of a tax avoidance scandal after a report by non-governmental organisation ActionAid exposed how Illovo used artificial structuring to dodge Zambian taxes. This meant Illovo paid an effective tax rate of 0.5% when Zambia has a corporate tax rate of 35%. ActionAid estimated that Illovo deprived the Zambian government of up to $3m in taxes – 14 times larger than British aid provided to it to combat hunger.

The Illovo deal offers a sense of the transactions involving secret trusts and webs of offshore shell companies.

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