MEDIA RELEASE: Pfizer profiting with billions from the pandemic while paying little in taxes
For immediate release: Feb 3, 2021
OTTAWA – As Pfizer pressures Ottawa for tax breaks in the upcoming federal budget, its full year financial results for 2020 show the company continues to pay very little in taxes while raking in billions in profits.
Pfizer reported total profits of US$9.6 billion in 2020 while paying an income tax rate of just 6.4%, up slightly from the even lower 5.4% tax rate it paid in 2019.
“We know large pharmaceutical corporations have benefited enormously from corporate tax breaks and loopholes but to see Pfizer’s steep decline in taxes, at the same time that it is aggressively lobbying during a pandemic for even more tax cuts and concessions, is astounding,” said D.T. Cochrane, researcher with Canadians for Tax Fairness.
Pfizer Canada is pushing the federal government to introduce a wide range of tax breaks and other concessions in the upcoming budget, including backing off on regulatory changes that would make drugs more affordable for Canadians. Despite failing to fill orders, including promised shipments to Canada, the company is expecting to rake in US$4 billion in profits this year from US$15 billion in sales of the COVID vaccine it developed with BioNTech. Other vaccine producers, including Johnson & Johnson and AstraZeneca have promised to sell their vaccines at cost and not make a profit, while Moderna has said it won’t enforce its COVID-19 patents during the pandemic.
Pfizer has been especially aggressive in using tax breaks, tax havens and profit-shifting to reduce its taxes. While the effective tax rates that Pfizer and other pharma companies pay has plummeted, so has the R&D they are conducting in Canada. As the Patented Medicine Prices Review Board has reported, pharmaceutical companies have reduced their spending on R&D in Canada to only 4% of their revenues, down from over 10% before corporate tax rates were slashed over the past two decades. Pfizer’s R&D in Canada is even lower, less than 1% of their sales.
Canadians for Tax Fairness is strongly urging Finance Minister Chrystia Freeland not to provide Pfizer and other profitable corporations additional tax breaks and preferential concessions in the upcoming budget. Instead, the federal government should introduce excess profits taxes, increase taxes on profitable corporations, close tax loopholes, and make medicine affordable for Canadians with a national pharmacare program and stronger price controls.
“The pandemic has shown that investments in public services pay off. It’s time to re-direct decades of spending on corporate tax breaks to programs that will help Canada become more resilient in future crises,” said Cochrane.
Media Contact: Erika Beauchesne | Communications Coordinator | Canadians for Tax Fairness
email@example.com | 613-315-8679
Canadians for Tax Fairness is a non-profit organization that advocates for progressive taxes to fund important public services, reduce inequality and strengthen the economy.