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The federal corporate income tax rate has been slashed from 35% to 21%, marking an unprecedented reduction. This should act as a sop to several companies that were looking to outsource any part of their operations abroad. As per business research conducted by PwC, 14% of companies have expanded their geographic reach while 30% are likely to effect changes by next year. Digitization is making all such changes now possible. 23% of top executives surveyed have confirmed that their organizations have invested in digital tools such as Robotic Process Automation (RPA), Machine Learning and Artificial Intelligence (AI). 54% have confirmed that they will use a substantial part of their annual savings towards such technologies next year. Where the present focus of companies till 2020 ought to be factor costs, scale effects and tech-focused factories, by 2025 the business environment will see a radical alteration. It will then involve agility, sustainability, innovative production setups and green footprints. Taxes are the 4th most important factor in sire selection after labour costs, infrastructure and proximity to customers. This new ruling must help US-based businesses. These tax savings are likely to be ploughed into research and development activities.

Source:https://www.pwc.com/us/en/library/fit-for-growth/tax-reform-business-update/advantage-footprint.html

Uploaded Date:27 September 2018

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