This paper is a study of tax incentives for economic development. The paper is devided in seven sections. Section 1 examines the different types of tax incentives that have been used in practice. Section 2 presents an analysis of the nature and the role of tax incentives for investment. The policy rationale underlying each incentive category is analysed and some of the more common technical and policy problems in the drafting of these incentives are examined. Section 3 examines the rationale for and the general features of tax incentives for saving. The rationale for and the problems associated with tax-incentives policies for regional development are discussed in Section 4. Section 5 considers some of the most frequently occuring problems and issues related to the granting of tax privileges. Section 6 examines the factors that affect the effectiveness of tax incentives and presents the results of empirical studies. Finally, Section 7 contains some concluding remarks.
