Causes, Benefits, and Risks of Business Tax Incentives
AbstractThis paper provides an updated overview of tax incentives for business investment. It begins by noting that tax competition is likely to be a major force driving countries' tax reforms, and discusses tax incentives as a possible response to this. This is complemented by other arguments for and against tax incentives, and by an illustrative analysis of different incentives using effective tax rates. Findings from the empirical literature on tax incentives are also presented. Based on the overview of theoretical and empirical findings, the paper then suggests a matrix of criteria to determine the usefulness of different tax incentives depending on a country's circumstances.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 09/21.
Date of creation: 01 Jan 2009
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Other versions of this item:
- Alexander Klemm, 2010. "Causes, benefits, and risks of business tax incentives," International Tax and Public Finance, Springer, vol. 17(3), pages 315-336, June.
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
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