Professor Natalia Ivanova,
Deputy Director, Institute of World Economy and
International Relations of RAS
‘Tax incentives for innovations’
2011 Russian–Finnish Seminar ‘Industrial
Modernisation: Is it possible to boost innovations in
Russia?’
27 October 2011
Outlines
1. R&D and innovation tax incentives –international
experience
2. Russian system of innovation and different tax
incentives
3. Policy options for the future
Economic theory foundations for
innovation policy
Keynes: State needed for stability, regulation,
budget programs vs. the ‘animal spirits’ of the
private sector.
Schumpeter: State needed for funding
‘conditions’ that will stimulate innovation in
the private sector.
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Science, Technology and Innovation
policy
Goals
Policy mix
•
vs. Market failures
• R&D subsidies,
•
for Big Science projects
•
•
Radical vs. incremental change
•
for New industries support
•
for National systems of Innovation
Tax incentives
• Target structural change
•
•
New view: Market making
•
Policy implications & green growth
Antimonopoly regulation
• ‘Right conditions’ for innovation
to thrive (investment in basic
research, venture capital funding,
public infrastructure, education)
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A smart innovation agenda, in short, would be quite different from the one that
most rich governments seem to favour. It would be more about freeing
markets and less about picking winners; more about creating the right
conditions for bright ideas to emerge and less about promises like green
jobs. But pursuing that kind of policy requires courage and vision – and most
of the rich economies are not displaying enough of either (Economist, 2011)
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R&D subsidies and tax incentives for business R&D, % to GDP
0,25
R&D SUBSIDIES FOR BUSINESS ENTERPRISES
0,20
Tax incentives
0,15
0,10
0,05
0,00
United States
(2001)
France
(2002)
United Kingdom
(2004)
Источник: OECD Reviews of innovation policy, 2007
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Norway
(2004)
Austria
(2002)
Australia
(2004)
Netherlands
(2005)
Canada
(2004)
Japan
(2003)
Business R&D, provided by tax cuts, OECD ОЭСР,
2008 г.
7
Innovation’s policy tracks for
developing countries. Russian option
• Transplantation of
advanced countries
institutes for S&T&I as
fast (and expensive?)
track:
- Science in Universities
- Venture companies
- Special infrastructure
- Special tax incentives
• Evolutionary
modernization of
domestic economy and
institutions on the track
to innovation friendly
conditions: freeing
markets, foreign direct
investments, industrial
policy, antimonopoly,
anticorruption policy
etc
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Russian Innovation System SWOT
• Strengths
• Weaknesses
• Growing
number
of
enterprises – general and in
some regions
• Real
experience
of
elaboration
and
implementation of innovation
policy instruments (both on
federal and regional levels)
• Historically high level of
Science and Education
• Growing infrasrtucture for
innovation activity
•
•
•
•
Low investment rate to GDP
and slow structural changes
reduce demand for innovation
Low
level
of
industrial
competition in many fields and
regions, weak antimonopoly
policy implementation
Limited
foreign
direct
investment and international
cooperation
in
high
tech
industries
Regular formal monitoring and
evaluation of innovation policy
measures for corrective actions
have not been used
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Innovation system SWOT 2
• Opportunities
Threats
• Focus
on
strategic
innovation
support
for
economically
advanced
industries
• International
trade
and
technology
cooperation
through global production
chains and organizations like
WTO and OECD
• Growing global market for
engineering
services
(aerospace, ITC, software)
• High competition on the
global high tech markets –
advanced and developing
countries producers
• State
corporations
domination in middle high
tech industries
• Accent
to
direct
government support of
innovation development,
nonmarket instruments of
innovation policy
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R&D tax incentives in Russia: general
overview
• Fragmentary, patchy and unstable character
of incentives
• Different interpretation of current measures
by enterprises and fiscal authorities
• Comlpex and very slow bureaucracy of tax
administration
• Low efficiency of incentive systems in
comparison with the growing burder of other
taxes
Foggy perspective view of Skolkovo(s)
Moscow School of Management SKOLKOVO
http://www.skolkovo.ru/
Non-Profit Organization Fund for Development of the Center for Elaboration
and Commercialization of New Technologies
5, 2 Baumanskaya Street, Moscow 105005,
Postal address: Krasnopresnenskaya nab., 12, Entrance №6, office 735,
Moscow, 123610
http://www.i-gorod.com/
2006 - The Moscow School of Management SKOLKOVO is organized
2010 - Campus is opened. First EMBA&MBA graduate
22.05.2010 - A Foundation for
Development of Skolkovo Innograd was
officially registered in Moscow
Skolkovo Tax Heaven
(Federal Law, September 2010)
• Social security tax credit (14% of normal level)
or No VAT
• No profit tax
• No Land tax
• Time frame – 10 years form registration
• Value limitation – up to Roubles 1 billion
annually for shipments
Skolkovo budget support
Direct budget support as in • To compare: Russian
“Federal Budget 2012Academy of Sciences
2013 proposal to Duma”
(central division)
• 2012 - 22,0 bln ruble
2012 - 34,99 bln ruble
2013 – 17,1 bln ruble
2013 – 36,4 bln ruble
2014 – 17,1 bln ruble
2014 – 37,1 bln ruble
• Basic sciences (all an all)
2013 – 90,4 bln ruble
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Tax incentives in oil industry
Comparison of Oil industry: Upstream Tax Regimes in Russia
and in Norway/ PWC presentation in IMEMO May 2011, available
on www.imemo.ru
Налоговый режим в России существенно хуже, чем в
Норвегии, но не из-за тяжести налогового бремени, а
вследствие его крайне неэффективной структуры в самых
чувствительных областях
Russian tax regime is significantly worse than Norwegian one,
however, not due to heavy tax burden, but due to extremely
ineffective structure in the most sensitive areas
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Влияние налогов на степень извлечения запасов
Tax impact on recovery rate
Норвегия / Norway Россия / Russia
Налоги на финансовый результат не являются «налоговым тормозом» для
современных технологий
Profits or profits-like based taxes are not “tax breaks” for modern technology
Налоги от объема добычи / экспорта - это «налоговые убийцы»
современных технологий
Production based taxes (MRET+ED) are “tax murderers” of modern technology
Вывод / Conclusion:
Россия катастрофически хуже с точки зрения условий для внедрения
современных технологий и других методов повышения степени
извлечения запасов
Russia dramatically worse for modern technology and other ways of recovery rate
increased implementation
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Two policy suggestions
• Strategic: re-consider balance between business
environment measures and industrial-innovation-R&D policy
programmes and instruments
- force investment/GDP ratio from 18 to 30 %
- financial institutions reforming (banking, pension system,
stock market, exchange rate policy)
• Administrative: embark on process of policy learning
– Build evidence based policy monitoring
– What works and what does not works, and why?
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