Journal of Applied Economic Research
ISSN 2712-7435
The Study Of Tax Incentives As Tool For Stimulating Charitable Activity (The Case Of The Banking Sector)
Golovan S.A.
Abstract
The article investigates the problem of the state to stimulate the participation of commercial entities in charitable activities. Comparing the charitable support of commercial organizations and a list of destinations that, from the standpoint of the state, has a special social significance, it can be concluded, that projects which the state views as priority ones have the same value from the point of view of business. That means that charitable donations in this case are aimed at the same end recipients of social services that also get public funding. In this study incentives for philanthropists are considered in the context of the replacement of budget funds allocated to finance socially important areas with private donations. The question of the appropriateness of tax incentives to encourage philanthropy is considered, and the possible effectiveness of philanthropy is assessed. The mechanism is analyzed of preferential tax treatment of charitable activities of commercial organizations used in the West as one of the alternative sources of financing for non-profit organizations. As an empirical basis for the study data from reports by banks operating in the Irkutsk region is sued. The article analyzes the main advantages and disadvantages of indirect subsidization of public goods and services through the mechanism of preferential tax treatment. Taking into account the factor of preferential taxation as a mechanism to reduce the cost of charitable services for the company, an evaluation is done of the existing level of participation of banks in the study of corporate philanthropy. The author attempts to construct a theoretical model describing the effect of tax incentives for the financing of the charitable sector, and tries to find the optimal limit of accounting charitable expenditure as a cost. The study leads to a conclusion about the hypothetical possibility of an increase in donations after with the introduction of preferential tax treatment, and substantiation is provided for the optimal level of charitable expenditures within expenses in terms of budget efficiency.
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Keywords
Key words: tax incentives; tax incentives; the efficiency of benefits; charities; subsidizing public goods and services.
About Authors
DOI: http://dx.doi.org/10.15826/vestnik.2016.15.1.07
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