Channel NewsAsia

Murdoch slams US push to block firms moving overseas for lower taxes

Global media mogul Rupert Murdoch slammed the US government on Thursday for pushing to stop companies from moving overseas to avoid paying taxes, saying it was "not the way to achieve economic growth".

SYDNEY: Global media mogul Rupert Murdoch slammed the US government on Thursday for pushing to stop companies from moving overseas to avoid paying taxes, saying it was "not the way to achieve economic growth".

Murdoch, who is in Australia for the B20 summit of business leaders, said such moves by US firms were not surprising as other nations such as Ireland offered lower corporate tax rates.

"The Treasury Secretary (Jacob Lew), I think only yesterday, has gone so far as to call into question the patriotism of those companies rather than admit the economic circumstances that are unfriendly to business and unhelpful to our long-term growth," Murdoch said.

"Do we really expect companies to voluntarily bring overseas profits back to be taxed at 35 to 40 per cent in the United States when the corporate tax rate in Ireland is 12.5 per cent?

"This is not the way to achieve economic growth."

Lew wrote in a letter to Congress on Tuesday that the country needed a "new sense of economic patriotism" and should reverse such moves, which have been described as "corporate inversions", US media reported.

"We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes," Lew added.

The criticism from Murdoch, whose empire was recently broken up into two separate units, 21st Century Fox and News Corp, came amid a string of foreign mergers by US firms -- particularly in the biotechnology sector -- to reduce their costs and tax burden and use their cash overseas.

US pharmaceutical firm Mylan bought Abbott Laboratories earlier this week in a deal that will see a new entity incorporated in the Netherlands, while medical-device maker Medtronic is reportedly in advanced talks to buy competitor Covidien, based in Ireland.

Drugs giant Pfizer recently abandoned an attempt to buy British firm AstraZeneca for US$117 billion in a deal that would have allowed the US company to take advantage of Britain's lower corporate tax rate. 

Tweet photos, videos and updates on this story to  @channelnewsasia