Effects of Taxation on Innovation and Implications for the Sustainable Development Goals

Abstract

Innovation plays a crucial role in the realisation of Sustainable Development Goals (SDGs) because it makes it possible to find creative and sustainable solutions that meet global challenges. However, the relationship between taxation and innovation is not linear and much less simple, as it can depend on various factors, such as the structure of the tax system, government policies, and how tax resources are used. This study aims to review the literature on the effects of taxation on innovation and its implications for achieving the SDGs. In this sense, a literature review was carried out that showed that taxation can have both positive and negative effects on innovation and that high tax rates and complex tax systems can discourage innovation because they reduce companies' financial capacity. The implications for Sustainable Development Goals are significant. Innovation and taxation are determinant factors in achieving the SDGs, as they drive technological advances and enable the development of sustainable solutions to tackle global challenges.