Introduction
The United States has become the world’s leading producer of oil and gas in recent years. However, a report revealed on Thursday that US fossil fuel companies produce most of their oil and gas domestically but pay billions more in taxes abroad.
Reasons for Higher Overseas Tax Payments
The primary reason behind this situation is the increased subsidies for these companies during Donald Trump’s second presidential term, according to an analysis by the FACT Coalition nonprofit organization.
Findings from the Report
The study examined the reports of 11 US-listed companies from 2017 onwards and found that they paid an effective tax rate of 12.1%, significantly below the legal corporate rate of 21%.
Although these companies produced 51% of their total volume domestically, they only paid 18% of their total taxes in the United States.
- Chevron’s tax payment rate within the US was 7.9%
- ExxonMobil, the largest US oil company, paid $11.5 billion to the United Arab Emirates between 2023 and 2024, nearly five times more than what it paid in the US during the same period.
Expert Opinion
Zorka Milin, the report’s author and FACT Coalition member, stated to AFP: “These policies make no economic, environmental, or ethical sense… It’s time for Congress to close these tax loopholes.”
Key Questions and Answers
- Q: Why do US oil and gas companies pay more taxes abroad despite producing most of their resources domestically?
A: The primary reason is increased subsidies for these companies during Donald Trump’s second presidential term, leading to lower domestic tax payments. - Q: What percentage of their total taxes did these companies pay in the US?
A: These companies paid only 18% of their total taxes in the United States, despite producing 51% of their total volume domestically. - Q: How much tax did ExxonMobil pay to the United Arab Emirates between 2023 and 2024?
A: ExxonMobil paid $11.5 billion to the United Arab Emirates between 2023 and 2024, nearly five times more than what it paid in the US during the same period. - Q: What is the recommended action according to Zorka Milin, the report’s author?
A: Zorka Milin suggests that Congress should close the existing tax loopholes to ensure fairer tax practices for US oil and gas companies.
