Reference no: EM13839012

Write your personal statement with the essay below.

Regional and local tax strategy drives supply chain in regards to property, value-added, inventory and income taxes. Property tax incentives and holidays attract firms to build manufacturing plants, distribution centers, and any type of business in their areas. In addition, tax holidays refer to temporary or permanent tax waiver on property, equipment, and/or inventory. In turn, firms shift to locations with more tax incentives. "For example, many firms have located warehousing in or near Reno, Nevada, rather than in California to reduce property and inventory taxes." (Bowersox, Closs, Cooper, 2013)

                Value-added taxes (VAT) are referring to tax incentives on corporate or individual income taxes. The VAT is based on the value added in certain country and range from 10-40 percent of the value increase which attracts foreign firms to the country. The total supply chain cost may inflict greater operation expenditure, firms with corporate taxes in the range of 30-50 percent still moves supply chain activities due to benefits of corporate and personal income tax advantages.
                 Whether it is property, VAT, inventory, or income taxes, governments use tax strategy to lure companies to their locations. Some may and may not benefit from this tax benefits depending on the parameter of firms' supply chain operation scales. When properties are sporadically located, it will increase the cost to operate the mission even with the tax benefits because of poor decision of logistics plan. However, strategic alignment of firm's supply chain operation will maximize the tax incentives and optimize its supply chain operations.

 

Reference:

Bowersox, D. J., Closs, D. J., & Cooper, M. B. (2013). Supply chain logistics management. Retrieved from https://online.vitalsource.com/#/books/9781308001029

ANSWER THIS QUESTION BELOW AND ANSWER IT ON THE LAST PARAGRAPH.

1) How do you feel about this tax? 

2) Indirect taxes including customs duties, taxes on production, sale and consumption of certain goods (excise tax) and general consumption taxes, such as value-added tax (value-added tax, regional taxes, local taxes or VAT, and the acronym in English) and the goods and services tax (goods and services tax, or GST, the acronym in English). Administer these taxes - to reduce costs and avoid errors that result in penalties for companies is crucial to maintaining profitability.

How do you think these companies plan for these indirect taxes?  Are the indirect taxes fixed or do they vary according to product?