08 May 2009 08:09 [Source: ICIS news]
By Bohan Loh
SINGAPORE (ICIS news)--US business operating costs would spike if the government’s proposed tax reform is adopted, dealing a blow on the overall competitiveness of American companies, said a partner at global auditing firm Ernst & Young (E&Y) on Friday.
Obama’s tax reform proposes to slap taxes on overseas income of American companies whether or not the funds are repatriated back to the ?xml:namespace>
Based on estimates by the American Chemistry Council, the reform could potentially increase the tax burden of industrial chemical manufacturers by 38% and of energy companies by up to 50%.
“Businesses would be forced to rethink supply chains, countries of operation and other fundamental operating questions,” said Baik.
“Based on these assessments, serious discussions are likely to take place on certain retractions of overseas operations, especially with regard to new investments the company is looking to make,” the E&Y executive said.
The proposed tax reform would also be a step back while the rest of the world was charging ahead with tax cuts and could affect the
“In recent years, many countries around the world have been lowering their corporate tax rates, so that the
OECD comprises the industrialized economies such as
ExxonMobil’s largest refinery as well as other petrochemical units are located in
Other US-based chemical companies such as Dow Chemicals, DuPont and Procter and Gamble also have very extensive global presence and could have their tax bill significantly inflated if the proposal were to be enacted into law.
“Many are stressing that the US tax code is already less competitive than those of other industrialized countries, and these proposals would further limit competitiveness by imposing a de facto tax increase on US businesses,” Baik said.
The city-state of
With additional reporting by Joe Kamallick
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