Comparative Study of Taxation Policy Reforms and Their Effect on Business Startups and Entrepreneurship

International Journal of Economics and Management Intellectuals [IJEMI]

Comparative Study of Taxation Policy Reforms and Their Effect on Business Startups and Entrepreneurship

Author : Dr. Ingrid Muller

Open Access | Volume 2 Issue 4 | 2025 | Pages 20–29

https://doi.org/10.63665/ijemi-y2f4a003

How to Cite :

Muller, I., "Comparative Study of Taxation Policy Reforms and Their Effect on Business Startups and Entrepreneurship", International Journal of Economics and Management Intellectuals [IJEMI], 2025, 2(4): pp. 20–29.
Journal Book

Abstract

Tax policy and entrepreneurial action have thus been a source of concern for entrepreneurship scholars and policymakers. The paper deems the impact tax policy reforms exercise over business startups' survival, entry, and development within various economies' regimes. Through comparative analysis of subject economies' tax environments, research presents evidence on how tax incentives, regulatory burdens, and regulatory alteration construct entrepreneurial energies or obstacles. Government expenditures, enterprise statistics, and surveys are employed to measure the actual impact of policy reform on entrepreneurship formation and survival. The impact is that tax policy reform is an influential entrepreneurship climate promoter, whose impact operates on risk-taking, investment, and general economic well-being. The paper provides policymakers with real-world considerations in attempting to balance company and innovation creation with revenue mobilization.

Keywords

Keywords - Taxation policy, Entrepreneurial activity, Business startups, Regulatory reforms, Tax incentives, Economic growth, Comparative analysis.

Conclusion

A. Summary of Key Findings

This research illustrates tax policy changes to have a real impact on startup establishment and entrepreneurship. Reduction in the corporate tax plays a role in startup establishment mainly by making financial sustainability more attractive, while simplifying compliance processes motivates formalization and the efficacy of operation. Targeted R&D and innovation incentives induce high-risk-high-return entrepreneurial action, especially in significantly technology-intensive industries. Comparative analysis also predicts that reform success varies by contextual determinants like economic maturity, institutional support, and sector characteristics.

B. Contribution to Theory and Practice

This research contributes to entrepreneurship and fiscal policy theoretical and pragmatic debates. Theoretically, it weaves Schumpeterian innovation analysis, institutional economics views of governance and uncertainty, and recent entrepreneurship theory on opportunity recognition to show how taxation interacts with these factors to influence business entry. In reality, the research presents policymaker recommendations grounded in evidence, noting that a balance between administrative ease, monetary incentives, and sector support must be found in order to possess a sound entrepreneurial ecosystem. Future research could assess the entrepreneurial sustainability, innovation diffusion, and industry competitiveness over the longer term because of tax change.

C. Suggestions for Future Research

Longitudinal studies would be able to offer more insight into the evolution of startups under different regimes of taxation as well as into the dynamic effects of concurrent fiscal and non-fiscal policies. Studies might also examine the mediating role played by social and cultural norms in responding to tax reform by entrepreneurs, especially in developing nations. Lastly, studying the linkage between taxation policy and international market forces would enhance the understanding of entrepreneurship in a more integrated economic environment.

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