At present, the multinational Pharmaceuticals industries are gaining huge profits through medicines sale, but at the time of paying tax, these monetary profits diminish as the companies transfer the cash into non-taxable, hidden accounts. After a deep investigation done by Oxfam (part of a global movement), it concluded that the multinationals hold back a huge amount of taxes through the tax-avoiding mechanism, and in return, the industries disapprove funding for the governments, often at the expenditure of the similar health care systems with which they operate their business.
According to the available financial data of different pharmaceuticals including Pfizer, Abbott, Johnson & Johnson, and Merck Sharp and Dohme, it has been concluded that from the year 2013 to 2015, these industries have avoided paying $3.7 Billion in the form of tax to different governments; out of all, these companies owe around $2.3 Billion to the U.S. government alone.
Technically, multinational companies are avoiding the taxes without abiding the laws, but the authorities need to understand that these tax avoiders are breaking financial drip and ultimately leading to the exhaustion of social budget of their countries. Actually, the main reason behind such tax avoidance by multinationals is the corporate tax laws. Basically, the laws are for the companies to reduce the tax burden in the countries imposing high-tax.
According to Oxfam, if the companies paid their tax amount of $2.3 Billion to the U.S. government on time, then the millions of people would have been vaccinated, that have died due to severe diseases.
Not only the richer nations, but the companies also have widespread over poorer countries. The tax dodging is also draining developing countries including India, Colombia, Thailand, Pakistan, Chile, and Peru with an approximate taxable amount of $112 Million.
The latest Tax-code revisions led by Trump Administration claim to aid corporate tax revenue to the U.S. However, the recent tax reform appears to be more favorable to the international drug manufacturers with huge tax cuts.
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