U.S. President Barack Obama on Tuesday urged Congress to close loopholes in the American tax system to help prevent U.S. companies from avoiding paying taxes.
U.S. corporations benefit from American infrastructure, technology and workers, but 'renounce their citizenship' by acquiring small firms and changing their addresses to abroad to avoid paying taxes in the U.S, according to Obama.
'They declare that they’re based somewhere else, thereby getting all the rewards of being an American company without fulfilling the responsibilities to pay their taxes the way everybody else is supposed to pay them,' Obama said.
The president praised Treasury Department's efforts to prevent corporations benefitting from the process called inversion, but stressed that only Congress can close such deficiencies.
'While the Treasury Department actions will make it more difficult and less lucrative for companies to exploit this particular corporate inversions loophole, only Congress can close it for good, and only Congress can make sure that all the other loopholes that are being taken advantage of are closed,' he said, adding that the global issue is being tackled by other countries, too.
'It’s been brought up in G7 meetings. It’s been brought up in G20 meetings. There has been some progress made in coordinating between tax authorities of different countries so that we can make sure that we’re catching some of the most egregious examples,' he added.
By Ovunc Kutlu in New York