Importance The relevance of the article is underpinned by considerations of prospects for implementing the draft law of the Ministry for Economic Development of the Russian Federation, which is aimed at tax incentives for investment in innovative projects under economic instability, as inefficiency of existing tax incentives results in economic stagnation. Objectives The objectives of the study are to review the efficiency of existing tax incentives under economic instability, and the applicability of the bill of the Ministry of Economic Development of the Russian Federation focused on investing in innovative projects. Methods We applied econometric methods to assess the efficiency of implemented innovation and analyze the downward trend in both investing and innovative activities of business entities in Russia for five recent years. Results We considered the existing tax incentives for investment in the high-tech sector of the economy, analyzed and correlated indicators of innovative and investment activities for 2010–2014, highlighted upsides and downsides of the implementation of the bill, which acts as a lever of tax incentives for investment development. Conclusions and Relevance Amendments to the tax law may stimulate investment in innovative projects, but also, under otherwise equal conditions, trigger the central government budget deficit, which is a negative factor impacting the country's economy.
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