The main objective of this work was to develop a set of scientific and practical recommendations aimed at
improving the efficiency of preferential tax treatment based on the analysis of the costs of tax relieves, their
types, and their performance evaluation. Direct and indirect costs of tax relieves granted by the World Bank were
analyzed within the research. Based on the analysis of legal acts that were in effect in 1990-2000, the specific
features and forms of tax relieves used in the Russian Federation were identified. The article shows the necessity
of expanded understanding of the tax relieves based on their actual manifestations in various forms, and, based
on this, extension of the efficiency evaluation object in the circumstances of the Russian Federation. The article
formulates the conclusion about the need to transform the tax relieves in order to strengthen their stimulating
effect on the economy development and achievement of the economic benefit and enhancement of the social
return. The regulatory-legislative, methodological, and organizational problems of evaluating the efficiency of
tax advantages at the regional level (using the materials of the Republic of Dagestan) were revealed, and also a
set of recommendations to address them was provided.