Tax incentives as a factor of economic growth ivana domazet and darko marjanović

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TAX INCENTIVES AS A FACTOR OF ECONOMIC GROWTH
1
 
IVANA DOMAZET
2
 and DARKO MARJANOVIĆ
3
 
 
 
Abstract
: Competitiveness of Serbia in attracting foreign capital depends to some extent on 
tax incentives granted to foreign investors. Therefore, the aim of this paper was to collect data on 
opinion, values, expectations and perceptions of foreign investors on the importance of tax incentives in 
certain areas of their business in Serbia. The methodology of empirical research in this paper is based 
on a quantitative approach to primary data collection through surveys of relevant participants, 
comparison of the collected data and the analysis of causality of the researched phenomena. According 
to the results of our research, foreign investors doing business in Serbia consider the most significant 
tax incentives those relating to the tax on income of legal entities, tax incentives for the employment of 
new employees and tax incentives for export companies, while the importance of other incentives is far 
lesser. In order to make the business environment in Serbia suitable for foreign investors and in 
accordance with their expectations, it is necessary to highlight the importance of these tax incentives. 
For economic policymakers in Serbia it is extremely important to adequately implement the preferred 
business incentives which foreign investors expressed in this survey. Analyzing the obtained results it is 
evident that there are good prospects for increasing the inflow of foreign capital. So as to achieve that, it 
is necessary to offer investors a wider range of tax incentives as soon as possible, taking into account 
other variables that may have an impact on investors when choosing Serbia as an investment 
destination, which would lead to the improvement of the business environment and economic growth.