A tax incentive is a financial benefit provided by the government to encourage specific behaviors or activities, such as investing in certain industries or making environmentally friendly choices. These incentives can take the form of tax credits, deductions, or exemptions, which reduce the amount of tax owed by individuals or businesses. Governments often use tax incentives to stimulate economic growth, promote job creation, or support social goals. For example, a renewable energy tax credit might encourage companies to invest in solar power or wind energy, helping to reduce reliance on fossil fuels and combat climate change.