Production fees are a bit weird for two reasons:
What is the analog in “real life”? Usually there are land taxes, sales (and transfer) taxes, and payroll taxes. The government doesn’t get involved in what happens in your own inventory…
If a bread factory feeds its workers with its produce, what does that have to do with government?
More importantly, it adds another level of planning. which is “OK” in theory because it is a strategy game, but at some point you have to realize that the point of the game is FUN. Having to cater for a variable tax every moment sucks the fun out of it. It would be much better to tax at the time of sale.
I can write more but I want to keep this post short.