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H&M accused of skipping tax payments in Bangladesh
Jun '10
According to a leading NGO, Action Aid, Sweden-based apparel chain, H&M paid merely 60 euros of corporate taxes in 2008 in Bangladesh, an indigent nation, which is one of its biggest suppliers.

According to Action Aid reports, Bangladeshi tax officials are quoted saying that, H&M's only ancillary unit in the country had made payments amounting to Tk 5,000 in corporate taxes in 2008. This was the minimal amount of tax that is to be paid by a business in Bangladesh.

But refuting the allegations made by Action Aid, the economic and stylish fashion chain reverted that, it had followed all the domestic laws in Bangladesh and by virtue of its operations in Bangladesh, several thousands of jobs were generated.

Bangladeshi Trade Minister, Muhammad Faruk Khan, is quoted saying that, H&M's actions were legal but unethical.

However, H&M spokeswoman, Jenni Tapper-Hoel told AFP in an email that, the company paid 60 euros in Bangladesh as administrative fee and that it had paid 3.2 million euros in the form of income tax, via wages of its 25 employees at its domestic office in the country. Hoel also mentioned that, since H&M does not have any turnover in Bangladesh, the firm cannot pay corporation tax.

Further refuting allegations of being immoral, Hoel added that, H&M pauid corporation taxes only in countries wherein it earned an income. She added that, her company's biggest contribution to Bangladesh's growth was that, H&M placed orders for production in bulk quantities, which helped create several thousands of jobs.

All these allegations and claims came to light owing to unrest amongst thousands of apparel labourers that demanded increased pay, forcing shutting down of nearly 700 factories, which provide top names in Western retail such as H&M.

By February end, a fire at the factory of one of H&M's suppliers engulfed 21 people. The company stands third globally as an apparel retailer after US-based, Gap and Inditex (Zara) from Spain. It does not have any factories of its own but makes use of over 700 suppliers, mainly from Europe and Asia.

Fibre2Fashion News Desk - India

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