Do Tax Incentives for Innovation Work? Evaluation of Effectiveness in Russia and in the World

In this paper using an overview of existing literature the authors try to find out whether tax incentives are an effective way to boost innovation or there are other factors, which reduce their efficiency in Russia.There is a comparison of tax incentives with government direct support for R&D -the authors conclude that both methods have pros and cons.The article also discusses reasons for low usage of tax incentives in Russia.Moreover, there is a description of key characteristics of the ecosystem necessary for innovation.Based on the provided overview the authors conclude that there is no significant reason to refuse tax incentives usage in Russia.The article provides recommendations to improve tax incentives: research of tax incentives efficiency by the federal government, the "patent box" introduction, creation of tax instruments for innovation stimulation, which can be used by individuals, reduction of barriers to benefits access, discussion of special economic zones efficiency and improvement of their tax regimes etc.