A tax holiday is a temporary reduction or elimination of a tax. It is synonymous with tax abatement, tax subsidy or tax reduction. Governments usually create tax holidays as incentives for business investment. Tax holidays have been granted by governments at national, sub-national, and local levels, and have included income, property, sales, VAT, ...
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http://en.wikipedia.org/wiki/Tax_holiday
A reduced tax rate that a government provides as an inducement to foreign direct investment.
Found on
http://www.duke.edu/~charvey/Classes/wpg/bfglost.htm
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