Tax Incentives as a Creative Industries Policy Instrument

Sigrid Hemels ()
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Sigrid Hemels: Erasmus University Rotterdam

Chapter Chapter 4 in Tax Incentives for the Creative Industries, 2017, pp 33-64 from Springer

Abstract: Abstract The primary function of tax legislation is to raise a budget for government expenditure. Tax incentives can also be used to achieve creative industries policy goals. This book defines tax incentives as a provision in tax legislation that departs from the benchmark taxBenchmark tax structure and favors creative industries, resulting in a reduction or postponement of tax income for the government. Tax incentives must be considered relative to alternative policy tools such as spending programs, regulations and information campaignsInformation campaigns . Many tax experts are not in favor of tax incentives. Some of their arguments apply to direct subsidies as well, but others are more specific to tax incentives. Even though tax incentives are not without fault, the OECDOECD has formulated conditions for successful tax incentives. Not only fiscal policyFiscal policy arguments but also creative industries policy objectives are of importance when deciding on the most appropriate instrument. From the latter perspective, tax incentives have several benefits. A prerequisite for the effective and efficient use of tax incentives is that they are accounted for, controlled and evaluated in the same way as direct subsidies. As this is currently not always the case, tax incentives are, in that respect, inferior to direct subsidies.

Keywords: Bench mark tax structure; Exemption; Allowance; Credit; Rate relief; Tax deferral; Fairness; Complexity; Tax expenditure budgettax expenditure budget; Sunset legislation (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/978-981-287-832-8_4

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