Tax Advantages as a Factor in Ensuring Enterprise Competitiveness
Tax Advantages as a Factor in Ensuring Enterprise Competitiveness

Author(s): Sergii Zhyliakov
Subject(s): Politics / Political Sciences, Politics, Economy, National Economy, Business Economy / Management, Economic policy, Public Finances
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: competitiveness; tax advantages; human capital
Summary/Abstract: This study explores tax advantages as a key factor in enhancing enterprise competitiveness under current economic conditions. Tax advantages are defined as legal instruments of the tax system that allow businesses to reduce their tax burden and free up financial resources for development. The purpose of the research is to identify such tax incentives in ensuring companies’ competitive advantages, to analyze the experience of Ukraine and foreign countries – particularly Bulgaria – in applying tax reliefs, and to assess the impact of such measures on innovation activity, investment attractiveness, and human capital development. The study employs a systems-based approach, analysis and synthesis of scientific literature, and a comparative method for evaluating various tax regimes and their outcomes. The findings show that the tax environment is one of the defining external factors of a company’s competitiveness. Excessive tax pressure restrains investment and complicates the recruitment of qualified personnel, thereby weakening firm’s competitiveness. Conversely, the provision of tax reliefs and the reduction of tax rates produce a dual positive effect. On the one hand, business expenditures are reduced, which improves profitability and price competitiveness. On the other, the saved funds may be reinvested in business expansion, innovation implementation, and workforce development. The paper presents examples of successful tax incentive applications. In particular, Bulgaria has introduced a uniform 10% corporate and personal income tax rate, which attracts investors and stimulates entrepreneurship. It is argued that tax incentives aimed at investment and innovation foster the technological renewal of production and the formation of long-term competitive advantages for firms. Tax advantages are an effective tool for enhancing enterprise competitiveness, as they enable the legal optimization of tax expenditures and allow the redirection of saved resources toward strategic development.

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