‘Tax avoidance is a big global problem’
6 April 2016, Nirapad News: President Obama has warned ‘tax avoidance is a big global problem’, and urged Congress to take action to eliminate tax loopholes.
‘A lot of it is legal, but that’s exactly the problem,’ he said, reports the BBC.
His comments come a day after the US Treasury Department announced fresh plans to prevent tax avoidance deals known as inversions.
Inversions involve a US firm merging with a firm in a country with a lower tax rate and have become more popular.
‘These companies get all the rewards of being an American company without fulfilling their responsibility to pay their fair share of taxes,’ said President Obama.
The President called inversions an ‘insidious loophole’ and said companies who were doing this were ‘gaming’ the system.
The Treasury Department has taken steps to prevent inversions twice before.
Its latest move focuses on a practice known as earnings stripping, where a company uses internal loans to move money from the US to its overseas operations.