DIFFERENTIATED TAX INCENTIVES FOR LOCAL INVESTORS TO MODERNIZE AGRICULTURAL MACHINERY AND EQUIPMENT

Abstract

Agriculture remains a fundamental sector for economic stability and food security in many developing countries. However, outdated machinery and insufficient technological integration significantly limit productivity and efficiency. This study explores the potential of differentiated tax incentives for local investors as a strategic tool to modernize agricultural machinery and equipment. The research examines the economic rationale behind tax incentives, analyzes their impact on investment behavior, and proposes a model for implementing tiered tax benefits. Using comparative analysis and theoretical modeling, the study demonstrates that targeted fiscal policies can stimulate domestic investment, increase agricultural productivity, and contribute to sustainable rural development. The findings suggest that differentiated tax incentives, when properly designed and implemented, can serve as an effective mechanism for accelerating agricultural modernization.