American firms offered aid to boost exports

Press, 6 September 1980, Page 3

American firms offered aid to boost exports

NZPA correspondent Washington New Zealand, which was criticised in the United States recently for its export tax incentive scheme, is not alone in offering taxation inducements to boost exports. The United States has its own scheme, which, according to the Commerce Department, is applied to about 75 per cent of all manufacturing and agricultural export sales.

About. .7000 United States companies are active participants in the complex scheme. The department estimates that it offers tax. savings of about - SUSIOQO, million a year, while generating additional exports of about SUS3SOO million. The United States itself has not escaped attacks, on

the scheme in international trade forums, coming under fire in anti-subsidy discussions.

However, American negotiators responded by citing “offshore subsidy benefits” awarded by other countries to their exporters and there was no international agreement on outlawing them. In the light of the international impasse, the Commerce Department says, the United States does not intend to drop its scheme, but, because of the international opposition, is also unlikely to expand it.

The scheme is known as D.1.5.C., an acronym for a Domestic International Sales Corporation. It allows a manufacturer or exporter to register himself as a D.I.S.C. and qualify for certain tax rebates on his export assets..

The regulations are highly complicated, with endless “small print” qualifications. But basically, the department says, it offers companies tax savings of between. 1 and 3 per cent on export income, provided the money) saved . is; ploughed back into export business or promotion.