Regulatory mechanisms of the tax policy
AbstractIn this article we justified the priority directions for the regulatory mechanism’s development, considering the importance to foster economic growth to increase the fiscal efficiency. We evaluated the level of taxation in Ukraine and the European Union. We found out that the tax structure has a significant impact on economic growth. Corporate tax is particularly harmful for economic growth, because affects the investment behavior of corporations that are making a significant contribution to total output. Taxes on labor have a greater negative effect on growth than the taxes on consumption because they are in progressive to a large degree, as well as they tax income from savings and investments. Our investigation showed that advanced economies more actively used the regulatory mechanisms of tax policy to stimulate new research and development, to increase investment in science-intensive production sectors. We propose the statements for introducing an investment tax credit on R&D, which is given at the initial stage of the innovation process and is calculated based on the amount of investment in the creation of qualified tangible and intangible assets, reducing the amount of actually accrued tax, which would stimulate capital investments in science-intensive sectors of the economy; an investment deduction of expenditures on R&D, which is calculated as a percentage from the sum of the actual or estimated costs for the creation, acquisition, or reconstruction of certain qualified types of tangible and intangible assets. In the survey a balanced approach to the tax policy in order to create financial conditions to counteract import expansion and to stimulate domestic export-oriented manufacturers is presented. Moreover, we proposed the tax incentives for the institutional motivational mechanism to stimulate economic development based on the innovative-investment approach, which would comply with the basic principles and guidelines of the advanced economic development.
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