Selected Aspects of the Financial Strategy of the Local Goverment Unit’s Oriented to the Development of Economic and Social Activity (Financial and Legal Analysis)

Abstract

Fiscal burden, especially taxes, is undoubtedly one of the factors influencing business decisions. Taxpayers often prefer one location for their business to another based on the local fiscal policy. It can also lead to a decision to relocate the company’s headquarters or to start a branch or plant elsewhere. The intervention function (stimulative, incentive) of taxation is linked to its non-fiscal impact on taxpayers. The results of tax interventions depend on the proper selection of incentives and their intensity. Despite doubts that have been raised around the rationale for the use of taxes as a stimulus influencing economic decisions (due to the interference with the principle of fair competition), tax incentives are widely used in practice.