Tax incentives for investments within the framework of the Corporate Income Tax: Effects and prospects of reform

Subject. The article addresses the tax expenditure of the State in the framework of the corporate income tax, aimed at encouragement of investments. Objectives. The purpose of the study is to assess the impact of stimulating tax expenses for corporate income tax on the volume and structure of investments in fixed capital within the framework of the current legislation and in the context of the ongoing tax reform in the Russian Federation. Methods. The study employed general scientific research methods, methods of economic analysis, correlation and regression analysis. Results. The paper analyzes State tax expenditures for 2016–2023 and the forecast period for 2024–2026 under the current legislation. It assesses the planned changes in the corporate income tax as part of the ongoing tax reform, presents a regression model to reflect the impact of stimulating tax expenditures of the State on corporate income tax for investments in fixed assets. Conclusions. Higher corporate income tax rates (up to 25%) may reduce investment activity of businesses that do not have access to investment tax benefits. There will be increased interest in applying reduced tax rates in both legal and illegal ways. Therefore, the federal investment tax deduction should be provided to a wide category of taxpayers, and the availability of borrowed funds for the implementation of priority investment projects should be ensured.