Pfizer Tries To Avoid Taxes Worth $35 Billion Through Allergan Merger
Tax agencies and groups are furiously making allegations that Pfizer would be able to avoid $35 billion worth taxes through merger with Allergan Plc.
Pfizer has been making headlines for its merger with Allergan Plc., which was reported to reach its completion very soon, only a few documents are left. Now a consumer group is making accusation that the medical organization is trying to merger in order to avoid US taxes of $35 billion, which will move the company’s address to Ireland and lower the taxes.
Pfizer Inc.’s merger with Allergan Plc. will allow it to lower its taxes by almost 17%, which was previously 25%, through the planned change to make in tax domicile. The Obama admin has been trying to prevent this from happening, so that other companies do not try to do the same, a process commonly known as inversion.
The Americans for Tax Fairness released a report on Thursday that said that the pharmaceutical company regardless of the merger is still going to pay taxes for the products it sells within the United States, if not internationally. The group is persuading many federal regulatory from preventing the merger and changes it will bring. It is not asking for this to happen only to Pfizer but all the other companies in different industries who are merging to trim down their amount of taxes.
The ATF is accusing the company for charging the citizens with more by raising their products prices on and off again and taking benefits from doing so. The organization has found another loophole yet again and is now trying to take advantage from it by lowering global tax to 6.4%, while the company claimed it had to pay 24%.
Five democratic members of the House said that the federal government should stop the $160 billion acquisition of Allergan and Pfizer at a press conference held in Washington. This did not happen and the merger is expected to reach its completion by the last six month of this year.
The CEO of ATF went as much as to call this merge a theft of a kind, Frank Clemente believes that the company’s income is really good and it is successful business. The group believes that laws needs to be made for inversion and new strategies needs to be rolled out rapidly. The treasury department should set new rules to prevent companies from taking advantage of a lenient system and profit from it.
If the business succeeds in merger, it might set a precedent for other businesses to follow and hurt the country.