The Effect of Tax Incentives on Local Economic Growth and Employment: Evaluation in Terms of TR33 Region

Within the scope of the study, tax incentives, one of the three main categories of incentives (financial/cash, fiscal/tax and other incentives), will be handled. In terms of contributing to the literature and policy makers due to the limited number of studies that demonstrate the economic impact of tax incentives in the literature, in this study, it is aimed to investigate the contribution of tax incentives applied to provinces in TR33 region between 2004-2017 to the economy of the region. Considering the results of the estimation in the study in which panel regression analysis was conducted, it was determined that the VAT exemption application had a positive effect on local economic growth in terms of the specified period and region, but the customs tax exemption had no similar effect. In terms of employment, the estimated coefficients of both the customs tax exemption and the VAT exception were not significant.