TAX POLICY OF THE COUNTRY FOR THE DEVELOPMENT OF AGRICULTURAL CLUSTERS

Abstract

Еhis article reveals the issues of the country's tax policy for the development of agricultural clusters. For example, tax systems can incentivise farm investments by reducing taxable income through provisions for depreciation. In some countries, the tax system allows farmers to smooth income variations over time by using tax averaging. Taxes on income, property and land, and capital transfer may affect structural change, while differential tax rates on specific polluting activities, resources, or input use may affect sustainability. This chapter outlines the wide range of tax rates, as well as the diversity and frequency of concessions in agriculture found across the reviewed countries. It briefly discusses the likely effects of tax systems and concessions for agriculture on the performance of the sector. Finally, it points to the need to improve understanding of the direct and indirect effects of tax provisions on agriculture and to evaluate the impact of tax policy on agriculture on a more regular basis.