Tax incentives as a tool of budgetary and tax regulation: Specifics of their use and evaluation of the effectiveness at the regional level
Importance The article focuses on tax incentives and methods used to evaluate their effectiveness at the regional level. Objectives We identify specifics of tax incentives at the regional level, determine challenging aspects of using regional methods to evaluate the efficiency of tax incentives and devise methodological tools that facilitate reasonable decisions on tax incentives to be introduced or granted. Methods When studying the specifics of tax incentives and evaluating their effectiveness at the regional level, we used methods of logic, systems, comparative, economic, statistical and dynamic analysis. Results We examined tax incentives, their substance, types and classifying characteristics. The article determines the specifics and reasonableness of tax incentives at the regional level and provides the rationale for setting conditions for better evaluation of effectiveness of regional tax incentives. We demonstrate a special role of clear and feasible methods of such evaluation and present its comprehensive and methodological tools that imply the use of the unified algorithm, variable set of indicators and weighted coefficients of economic, budgetary and social effectiveness of tax incentives. Conclusions and Relevance The research determines areas for improving the stimulating role of tax benefits at the regional level and necessary adjustment to methodological approaches to their efficiency evaluation. The article presents an algorithm-based methodology for integral evaluation of effectiveness of tax incentives. Those tools will allow for reasonable decisions on the introduction, prolongation, adjustment and elimination of tax benefits.