Benefits are not expenses, but profit: aviation can repay state support threefold

If the state reinstates tax preferences for the aviation industry, which were in effect from 2017 to 2024, it will receive UAH 55 billion in tax revenues over the next 10 years. In addition to guaranteed financial benefits, such support will also stimulate the development of one of the strategic industries, writes UNN.

The professional aviation community calls on the state to reinstate tax benefits for the industry, which were in effect from 2017 to 2024. Without state support, the industry is on the verge of survival: war, “closed” skies, loss of logistics, energy disruptions, and enemy attacks on infrastructure – all of this is hitting aviation hard.

Instead, a 10-year exemption of the strategic aviation industry from five tax points: profit, land, value-added tax during import and sale of its own products, import duty on technological equipment – would allow aviation enterprises to direct saved resources to their own development. The importance of supporting aviation enterprises was also emphasized by economist and aviation market expert Bohdan Dolintse.

“The state’s primary priority today should be to support the defense-industrial complex and related enterprises, including the aviation industry, which directly contribute to increasing the country’s defense capabilities. In addition, sooner or later, it will be necessary to restore air traffic, including civilian. To ensure that relevant companies maintain their existence, and by maintaining their existence, preserve the infrastructure they own and manage, one of the important steps is to provide support to the aircraft manufacturing and aerospace aviation industries. So that there will be something to restore and somewhere to restore these flights later,” Dolintse noted.

The Aerospace Association of Ukraine calculated: tax benefits for the next 10 years will amount to UAH 18 billion. And in the future, they will bring the state UAH 55 billion in tax revenues over the same period under other tax items. This means that support is not a loss, but on the contrary – a strategic investment. After all, all the money saved on taxes, under the terms of the preferences, companies reinvest in the modernization of production facilities, the introduction of innovative solutions, an increase in the number of jobs, and the development of new types of aviation equipment.

“Only for 2025-2035, the industry is capable of providing the state with over UAH 55 billion in tax revenues with an expected volume of benefits of about UAH 18 billion. That is, every hryvnia of preferential support can bring more than three hryvnias in taxes – significantly more than in pre-COVID years,” the Aerospace Association of Ukraine reported.

RecallIn 2017-2024, the benefits allowed aviation industry enterprises not only to modernize equipment and create new jobs but also to ensure significant tax revenues – UAH 22.91 billion. At the same time, the tax preferences themselves amounted to UAH 9.33 billion in benefits. That is, every UAH 10 invested in the form of tax exemption returned to the state in the form of UAH 25.

In December 2024, the industry lost tax support. This has already affected the results: only under KVED H52.23 “Auxiliary services for air transport,” budget revenues decreased by 3.5 times – from UAH 2.2 billion in 2020 to UAH 620 million in 2024.

A separate threat is the outflow of personnel. The industry is losing engineers and technical specialists who are leaving the country or changing their field of activity. Restoring such competencies is a matter of decades.

If no action is taken now, after the war, the country may lose not only enterprises but also technological independence. Restoring tax preferences is a critically important step to preserve aviation as a key element of defense capability and future economic development.