EFF STATEMENT ON REPORTS OF TRANSFER PRICING AND PROFIT SHIFTING ACTIONS OF LONMIN The Economic Freedom Fighters notes the statement issued by the Alternative Information and Development Centre (AIDC) illustrating that Lonmin is involved in the practice of transfer pricing and profit shifting. The EFF condemns the reported practices of Lonmin because we believe their treacherous actions border on criminality. In the statement, the AIDC illustrates that, In sum, Lonmin, just for the years 2008 to 2012 transferred in commission fees $160 million (R1,231 billion) to a Lonmin subsidiary, Western Metals Sales Limited based in Bermuda, a well known tax haven. A further $155 million (R1,170 billion) was paid in management fees to Lonmin Management Services. These amounts were shifted from Lonmin’s South African operations and effectively put out of reach of possible wage demands, meetings of its social labour plan commitments and beyond what would have been “taxable income”. It is necessary to ask is if this a case of the so-called “illicit financial flows” that has so worried African heads of state and prompted the Economic Commission for Africa (ECA) and the African Union (AU) to establish the High Level Panel on Illicit Financial Flows. Lonmin’s Bermuda connection is one piece in a complex inter-company labyrinth and picture of excessive dividend payments before the 2008 crash, exorbitant executive salaries as well as yearly management fees to head offices What this means is that Lonmin, where Mineworkers were murdered and where Cyril Ramaphosa is a Director has been claiming that they do not have money to pay workers the R12500 minimum wage, while they are in reality shifting billions of Rands to tax havens. As is evident now, Lonmin pressurised its BEE Security Guard Cyril Ramaphosa to use his political influence that government should define workers protest as a criminal activity and should act with concomitant action. Lonmin, through its economic security guards instigated the murder of Mineworkers on the false basis that they cannot afford the salaries demanded by workers. Since the beginning of the 5th democratic Parliament, the EFF had constantly spoken about the practice and occurrences of Base Erosion, Profit Shifting and Transfer Pricing. The EFF tabled concrete recommendations in the Minerals, Finance, and Trade & Industry committees that mechanisms should be put in place within the current legislative framework to combat transfer pricing. South Africa is being drained of massive potential resources and revenue by corporate criminals and it is high time we say Enough is Enough! ISSUED BY THE ECONOMIC FREEDOM FIGHTERS and EFF Youth Command
Posted on: Fri, 19 Sep 2014 16:12:07 +0000
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