Unilever is facing calls to be more transparent about its tax treatment in Russia amid fresh scrutiny of its decision to remain in the country.< /p>
Campaigners are calling on the Dove and Marmite maker to reveal how much it has paid the Kremlin over the past year, saying it is the least it can do given its failure to abandon Russia.
This comes after the Russian government last month announced plans to lift requirements requiring companies to publish information publicly.
President Vladimir Putin signed a decree allowing individual business entities “to have the right to independently determine the content or scope of information to be disclosed or provided.”
It is unclear which one exactly. companies that will be affected by the order, including Unilever.
However, the move to greater secrecy has raised concerns among tax experts that it is becoming increasingly difficult to track how much companies are paying to the Kremlin.
It has led to to tighten control over the consumer goods giant's tax payments. considering that this is one of the largest Western companies still operating in Russia.
Companies such as Coca-Cola and McDonald's decided to leave after the invasion of Ukraine, but Unilever maintained its presence.
In 2022, Unilever condemned the war in Ukraine as a “cruel and senseless act of the Russian state” and suspended imports and exports to Russia.
However, the company, which has factories and employees in Russia, has decided to continue to sell what it considers «everyday products», including its ice cream range.
While Unilever typically publishes its own global tax report, there are discrepancies between its figures and analysts' estimates using data from Russian companies.
In its latest global tax report, Unilever said it paid in Russia in 2022 taxes in the amount of 3.8 billion rubles (about 30 million pounds sterling).
The company says it has collected a further 4.5 billion rubles (about £39.5 million) from employees. and clients on behalf of the Russian government to account for things like VAT and sales taxes.
However, experts from the Kyiv School of Economics (KSE) estimate Unilever's total tax deductions in Russia in 2022 to be at least $331 million, arguing that the company's figures do not include all tax deductions.
KSE says it calculates its figures using local cash flow reports and official government data sources.
Valeria Voshchevskaya, a campaigner at the Ukraine Solidarity Project, said Unilever should be transparent about the costs of staying in Russia: “They seem to think they can just wait it out, but every day the war continues, complicity Unilever is getting deeper into it.
“This is a complete failure of management, and history will not judge them kindly if they don’t do the right thing now.”
“Unilever’s continued operations in Russia have led to the company’s incendiary war in Ukraine, investing millions in Putin’s military budget.”
Activists protested Unilever's continued presence in Russia outside its London headquarters on Schumacher's first day as chief executive. Photo: Chris Ratcliffe
Unilever has already been added to the list of international war funders for Ukraine due to its decision to continue operations in Russia.
However, the company said remaining in Russia to sell food and hygiene products is “the best option, both to avoid the risk of our business falling into the hands of the Russian state, directly or indirectly, and to help protect our business.»
The company, which has for years prided itself on its “social purpose,” said there was a risk that by selling the business the Kremlin could potentially “reap additional benefits.” < /p>
This position came under scrutiny after the company admitted it would allow thousands of its Russian workers to be drafted into the war in Ukraine.
After this position was made public earlier this year, Unilever said it «always complies with all laws of the countries in which we operate.»
In October, new CEO Hein Schumacher said Unilever I was still considering all the options. However, he added: “It is clear that the containment measures we have taken minimize Unilever's economic contribution to the Russian state.”
This is the latest in a series of ethical disputes for Unilever.
In December, Britain's competition watchdog announced it was launching an investigation into allegations that the consumer goods giant was involved in greenwashing.
This includes claims that customers were misled about how environmentally friendly their products were.
In response to the inquiry, Unilever said it was «surprised» and is disappointed» with this statement, since it denied the claims.
When asked about the tax system in Russia, Unilever declined to comment.
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