Aviation can become an economic driver: MP Venislavsky on the prospects of the industry after the adoption of Defence City

The Defence City bill, after revision, takes into account the interests of Ukrainian aircraft manufacturers, and further steps should be aimed at restoring industry tax benefits and guarantees. This was stated by Fedir Venislavskyi, a member of the parliamentary faction of the political party “Servant of the People”, Head of the Subcommittee on State Security, Defense and Defense Innovations of the Verkhovna Rada of Ukraine Committee on National Security, Defense and Intelligence, in an exclusive comment for UNN.

DetailsAccording to the MP, the package of bills on the creation of Defence City, adopted in the first reading, initially practically did not take into account the needs of the aviation industry. However, after discussion in the VR Committee on Finance, Tax and Customs Policy and consideration of the submitted amendments, a compromise solution was reached.

Defence City is the first step to ensure stability. This regime is primarily designed for enterprises that manufacture weapons. At the same time, aircraft manufacturing enterprises, most of which are somehow involved in the security and defense sector, will fall under the Defence City regime. Not all without exception, but the vast majority will. Thanks to the committee amendment, which was supported by all members of the tax committee, it was possible to take into account the main ideas to support aircraft manufacturers and aviation in general.

The MP also emphasized that the document creates conditions for reinvesting funds in production, expanding capacities, and protecting enterprises in terms of limiting access to sensitive information. This, in his opinion, is an important intermediate result for both security and industry development.

At the same time, the MP emphasized that in the future it is necessary to restore benefits and guarantees for the aviation industry, which expired on January 1, 2025.

The development of aviation can become a driver of the Ukrainian economy, because it is not only the production of aircraft, but also the export of technologies, the creation of the state’s image on the international arena. The aviation industry is 99% high-tech enterprises that produce competitive products for world markets.

The MP noted that the issue of providing benefits and preferences for various industries, including aviation, is being discussed both at the national level and at the local self-government level, as it concerns the use of land plots by enterprises in different regions. In his opinion, compromise solutions should combine the interests of the state as a whole, territorial communities, and the aviation industry to create the best conditions for the development of Ukrainian aviation as a progressive and competitive industry at the international level.

Many of our aircraft have tactical and technical characteristics that surpass foreign analogues. Therefore, we must support these enterprises and give them the opportunity to develop, because this can become a powerful driver of Ukraine’s economic development.

RecallThe Aerospace Association of Ukraine reported that aircraft manufacturing is a strategic industry in Ukraine that ensures defense capability, provides jobs for more than 40,000 people, and creates a multiplier effect for dozens of related sectors.

According to the President of the Association, Viktor Popov, tax benefits for 2017-2023 brought 9.3 billion UAH of released funds to the system, and in return the state received 22.9 billion UAH in taxes. That is, the effectiveness of tax benefits was 2.5 times, in fact, for every hryvnia of tax incentives, the state received 2.5 hryvnias of taxes.

From January 1, 2025, this support will be cut off, and enterprises will be forced to work at their limit, fulfilling defense orders without proper resources. Therefore, further search for optimal solutions to urgent issues is critically important.