Tax incentives for energy efficient investments in the context of neo-industrial paradigm in Russia

Abstract

The study contents an analysis of existing preferences in Russian Federation, aimed at incentives for investments in energy efficiency industry. Among them there are exemption from property tax of highly energy efficient facilities, accelerated depreciation and investment tax credit. We have revealed the reasons for reduction of their demand on the part of taxpayers. It is suggested to improve tax incentives for energy efficient investments in order to focus on achievement of the objectives of neoindustrialization of Russian economy. We have proven the necessity to increase energy efficiency of manufacturing industry within the implementation of the policy of new industrialization according to the principles of labour saving, lack of people, disposability, recycling of the resources, post-oil energy, human reproduction and a healthy environment. However, the expansion of industrial manufacturing and the achievement of living standards of developed countries require a significant increase in energy consumption. Therefore, the priority of tax incentives should be not a reduction of quantitative indicators of energy saving but energy efficiency due to the growth of quality indicators. So energy-output ratio of the economy should be decreased not because reduction of the amount of consumed fuel and energy resources, but because of growth in gross domestic product. Moreover, economic growth rates should be higher than the growth rates of energy consumption. To implement this in the medium term we suggest monitoring and improvement of the existing preferences. In particular: to avoid duplication of privileges and preferences, to change specific ones to more general ones simpler in use and administrating; to fully delegate the authorities for establishment of privileges and preferences on the regional tax to the subjects of the Russian Federation; to intensify the use of credit against tax, including investment credits against tax.