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 4^th 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