GM Asks Government to Eliminate Tax Liability
Due to slumping sales and low consumer demand, General Motors is appealing to the government to waive its billion-dollar tax liability. Apart from this plea, the automaker is also seeking a bailout package from the government amounting to $13.4 billion.
Meanwhile, last year was a tough period for “Detroit’s Big Three” as the housing market collapsed and credit crunch paved the way for recession.
US car giant General Motors on Sunday appealed to the Federal government to waive its $7 billion worth of tax liability in an effort to steer the company away from bankruptcy.
Apart from absolving the automaker from its tax liability, it has also sought $13.4 bailout package from the government to keep the business afloat.
According to experts, the waiving of the tax bill will be substantially helpful for the company as this can lessen the impact of the automaker’s slumping sales and low consumer demand.
Last month, the Bush administration has approved the bailout plan for General Motors which also included the proposed suspension of the automaker’s tax liability.
Last week, the House approved the $819 billion worth of rescue package to help the auto industry which is one of the hardest hit economic sectors in the US amidst the worsening global recession.
Meanwhile, the government stipulated that General Motors should submit a report regarding its business operation and progress before two weeks. If the company will fail to submit its progress report, the loans will be revoked.
On February 17, the Federal government will give the automaker’s final loan package worth $4 billion.
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