ABSTRACT
Among governments of developing countries, it is a widespread practice to operate schemes which give tax concessions (or, more rarely, subsidies from public expenditure) to newly established firms or old firms starting new activities. The rationale for such schemes eems straightforward enough, and is conveyed by the description as 'fiscal incentives'. It is that governments which want to promote economic growth in a mixed economy should use appropriate fiscal means to induce private sector firms to make their contribution to the desired expansion of national output.
