State Promotion Of Investment Activity In Russia
Journal of Contemporary Issues in Business and Government,
2021, Volume 27, Issue 1, Pages 3489-3499
AbstractInvestment activity is an undoubted driver of economic growth. In order to attract investments in the economy a whole range of measures has been developed by Russian Government, including investment protection and promotion agreements, special investment contracts, state program “Project finance factory”, various tax benefits and preferences for participants in investment activities. These efforts are aimed at eliminating such problems as lack of long-term resources in the economy, high tax burden, volatility of legislation, administrative barriers to business activity, namely, long procedures for providing land resources, obtaining construction permits and connecting to utilities. The article provides analysis of the expected effectiveness of measures aimed at promotion of investment activity. It is shown that investment protection and promotion agreements and state program “Project finance factory” should become effective measures for providing stable environment for investments and attracting long-term resources in the country’s economy. The reloading of special investment contracts could contribute to modernization of industry, but a long period of negotiation of contract details doubts the effectiveness of this measure. This study suggests that a minimum threshold of capital investments and a deeper differentiation of tax benefit terms depending on the invested amount of funds should be introduced in the mechanism of special investment contracts. The article presents a list of tax benefits for participants in investment activities and concludes that preferences are more effective in less developed regions which have a higher need in investments. It is also proved that the provision of tax benefits to investors under special investment contracts is possible, only if it does not lead to a decrease in the volume of existing tax revenues of the region. The conclusions presented in the article may be useful for developing countries which have the same problems with implementation of long-term investment projects.
- Article View: 15
- PDF Download: 15