High innovative activity is one of the main factors in achieving high growth of economy and its structural modernization. Naturally, innovation is one of the main directions of economic policy, which is currently being developed by the governments of most countries in the world with the aim of ensuring a high level of competitiveness of economies. However, the implementation of innovation is associated with high commercial risk, making it less attractive from an economic point of view than ordinary economic activity. As a consequence, involvement of investors into the economy willing to invest in the development of innovations is only possible through the creation of an enabling environment and reducing their costs, which partially compensates for the high investment risks. In an economy with weak market institutions and undeveloped financial system the fiscal policy is the most efficient and active tool for solving such problems. The lack of sufficiently attractive fiscal incentives for investors is a significant problem for the development of innovation within scientific parks. The article reveals the economic content of innovative activity subject to the provisions of applicable law. It defines the essence of innovation development and approaches to its definition. The dynamics of innovation activity in Ukraine is analyzed. The sources of financing of innovative activity in the national economy are estimated. The tendencies of introduction of innovations at industrial enterprises in Ukraine are examined. The main obstacles to innovation processes are outlined and the strategic priority directions of innovative activity are defined. The role of the state innovation policy in the transition to innovative model of economic development is explained. The most effective tools of support and tax stimulation of innovation activity are analyzed. The ways of increase of tax incentives functioning efficiency in Ukraine taking into account foreign experience are defined. The fact that the mechanisms of tax regulation of innovative development and effective instruments of support in Ukraine require further substantiation is proved. Despite the fact that Ukraine has preserved a large-scale scientific facility, capable of producing world-class results, it is only partially involved in the innovation sphere. The economic effect can be achieved only through systemic and comprehensive policy for stimulating innovative activity. 

innovations, innovative activity, innovative development, tax regulation, tax incentives 

The fundamental changes in the areas of economic development and its strategic bases are the main feature of the global economy at the beginning of the XXI century. Emphasis on the movement of the accelerated innovation development, shift to a knowledge-based economy are particularly important for the national economy, where previously all innovation process was determined the entire decisions of higher authorities by budgeting and financing. Recently, there has been an increase of interest in budget management innovation activity in the national economy due to necessity of modernization the economy and, consequently, its organic inclusion in global economic processes and harmonization with existing in the European Economic Area standards. Innovative development, innovation activity and ways to increase its effectiveness have been extensively studied by domestic and foreign scholars. This paper focuses on founded theoretical principles of budget management innovation and practical aspects of the budget instruments of innovation stimulation in the modernization of the national economy. This article explores the theoretical bases of fiscal adjustment. The budgetary adjustment as a set of tools and levers by which the state creates conditions for the mobilization of financial resources and its effective use are considered, as well as balanced and coherent budgetary instruments impact on the adjusting objects including innovation activity. Budget management tool of innovation activity are exposed. Investment budget, budget loans, state guarantees, government subsidies as potential tools of innovation activity improvement are researched. The sources of innovation funding in Ukraine are estimated. Principles of financial support of innovation processes are defined. The influence of budget policy on the efficiency and effectiveness of the use of budget management tools of innovation stimulation is found out. The priorities of budget management of innovation activity in the conditions of the national economy modernization are outlined. Thus, fiscal policy aims to stimulate innovation development will strengthen the national economy competitiveness, modernization, rising the standard of well-being and quality of life. In this context, there is importance of increase the effectiveness of fiscal adjustment measures and revision of specific priorities in conjunction with the introduction of effective incentives within the public innovation policy. Thus, the effective use of budget management tools should promote the improvement of the national economy, its upward development on the basis of gradual modernization and permanent innovation activity. 

budget, budgeting, budget management, budget management tools, innovation, innovation activity