Tax Competitiveness as a Significant Factor in Attracting Foreign Investment : The Case of Sebia

Marjanović, Darko and Domazet, Ivana (2021) Tax Competitiveness as a Significant Factor in Attracting Foreign Investment : The Case of Sebia. Argumenta Oeconomica, 47 (2). pp. 63-80. ISSN 1233-5835

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Abstract

Tax competitiveness signifies a strategy that the government uses to attract foreign
investment through appropriate, privileged tax measures. It most commonly occurs between
neighbouring countries, with significant tax reforms taking place in terms of the competitiveness
of their tax systems. A high degree of a state’s competitiveness allows for a greater inflow of
foreign investments, which, to a certain extent, can significantly affect its economic growth and
development. Tax competition in itself means that one jurisdiction attempts to attract foreign
capital by offering favourable tax treatment to foreign investors, most often through tax relief
and tax exemptions, while at the same time reducing the tax base and/or tax rate. The main goal
of this paper was to determine the degree of tax competitiveness of Serbia in relation to other
European countries, classified both by region and globally. Based on the goals set, the authors
conducted empirical research which allowed to reach the viewpoints of foreign investors in
terms of tax competitiveness, based on their opinions and future expectations. The research
involved the largest foreign investors who invested capital in Serbia in the past 20 years, and who
carried out their business activities in other European countries or regions. The methodology of
the research was based on a quantitative approach, allowing to obtain numerical data, their mutual
comparability, and to determine the connection that exists between them. The results clearly
indicate that the largest number of foreign investors believe that Serbia’s tax competitiveness is
essentially the same compared to other European countries from the observed regions. These
results can be of interest to fiscal policy makers, and it is very important that in the coming period
there will be an increase in competitiveness, which can have positive effects both on the inflow of
foreign investment and the economic growth and development of the country.

Item Type:	Article
Additional Information:	COBISS.ID=51935241
Uncontrolled Keywords:	tax competitiveness, economic growth and development, foreign investment
Research Department:	Macroeconomics
Depositing User:	Jelena Banovic
Date Deposited:	31 Dec 2021 10:04
Last Modified:	31 Dec 2021 10:04
URI:	http://35.240.28.64/id/eprint/1702
Author Links:	[error in script] No links available.

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