Bangalore: The US President Barack Obama on Thursday issued a veiled threat on offshoring saying that he would end tax breaks that encourage companies to create jobs and profits outside the US—a threat that analysts said would impact multinational firms more than any Indian IT services firms.

The president was speaking in Cleveland, Ohio. The state has proposed to ban offshoring of all government IT projects. Ohio’s unemployment rate is higher than the national average of 9.5%.

“For years, our tax code has given billions of dollars in tax breaks, encouraging firms to create jobs in other nations. I want to change that,” the President said. Instead of tax loopholes that incentivise investments in overseas jobs, he will propose a “generous, permanent extension of tax credit that goes to firms for research and innovation done in the US”.

This is not the first time that the President has spoken about loopholes in the US tax code. In May last year, Obama had proposed to close loopholes in a tax code that says “you should pay lower taxes if you create a job in Bangalore, than one in Buffalo, New York.”

Source: http://www.financialexpress.com/news/Obama-threatens-to-end-tax-bre...