How Airtel’s subsidiaries paid Intelsat’s Mauritius-based company for services in Sierra Leone
Sierra Leone, like the Republic of Congo, Chad, Gabon, Madagascar, Niger and the Democratic Republic of Congo, may have lost huge amounts of tax revenues to treaties with countries like Mauritius.
Some of those contracts to New Dawn Distribution Company, according to amaBhungane Centre for Investigative Journalism and the International Consortium of Investigative Journalists (ICIJ), brought in $100,000/month.
They argue that if New Dawn’s purpose was to promote African development, its tax strategy did exactly the opposite. This is evident from the Paradise Papers — 13.4-million documents leaked from 19 tax havens and in the possession of amaBhungane and the Financial Mail.
Financial and company laws in Mauritius, a tax haven, “are structured to provide tax advantage to companies to the detriment of countries [like Sierra Leone] where the real economic activities occur and value is created.”
“The purpose of the tax structure is to drastically minimise the tax exposure of the company and pay as little as possible, which the company has successfully achieved,” says Alexander Ezenagu, an international tax researcher with the International Centre for Tax & Development, who analysed Intelsat’s documents.
Intelsat told ICIJ that, in general, “we pay withholding taxes, where required, through contractual terms with our customers in the countries where the services are being consumed.”
“That’s exactly the problem,” says Alvin Mosioma, executive director of the Tax Justice Network Africa, who describes telecommunications companies as “one of the major culprits on the continent when it comes to aggressive tax avoidance.”
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