Expert on Defence City: a good start, but additional support tools are needed for critically important companies

The launch of Defence City in Ukraine should mark a new stage in the development of the defense-industrial complex. At the same time, some enterprises that ensure the country’s defense capability may remain outside the initiative, and they need separate support mechanisms from the state. This was stated by Ihor Zhdanov, head of the “Information Defense” project of the “Open Politics” Foundation, in an exclusive comment for UNN.

The adoption of laws on the creation of Defence City should be welcomed, as it is a positive step for the defense-industrial complex and enterprises that produce defense products. Residents will also include companies involved in aircraft manufacturing that supply components for aircraft. For them, the share of defense income is set at 50%. All this is the right decision

At the same time, the expert drew attention to the fact that there is a category of enterprises that may not reach 50% or 70% of defense income, but at the same time produce critically important parts and components for the Ukrainian defense industry.

Even a small detail can become an indispensable component of aircraft, drones, missiles, etc. It is fundamental that the formal approach does not limit the rights of such manufacturers and that the Ministry of Defense of Ukraine, which will be responsible for the register of Defence City residents, does not have a division into “friends and foes”, especially on political grounds. This is crucial

In addition, he stressed that many companies contribute to ensuring the country’s defense capability by working at the intersection of aviation, drone production, and other related technologies, but formally remain civilian enterprises without state support.

Is this right? In my opinion, no. We need to find mechanisms that would allow such manufacturers to be granted the status of critically important for the defense sector, so that they can enjoy appropriate benefits

Regarding targeted support for aviation enterprises, which until 2025 enjoyed benefits and preferences (in accordance with the Law “On the Development of the Aircraft Manufacturing Industry” and were recognized by the Cabinet of Ministers as critically important for the economy and defense capability, – ed.), Ihor Zhdanov noted that this situation requires review and proper resolution. According to him, not only the financial ratio of paid taxes to received benefits is relevant, but also taking into account the realities in which Ukraine lives today.

Of course, it is necessary to make calculations and note those cases when the provided benefits return a hundredfold to the state budget. But first of all, the country’s defense capability is important. After all, if we lose this war, there will be nothing to count – there will be no budget, no country, no state

RecallYarema Zhuhayevych, Head of the Trade Union of Aircraft and Machine Building Workers of Ukraine, in a comment to UNN emphasized that aviation and aircraft manufacturing play a key role in ensuring the state’s defense capability, as Ukrainian enterprises are capable of supplying the army with competitive, certified, and reliable equipment.

This opinion was supplemented by Colonel Pavlo Bardakov, commander of the Army Aviation of the Armed Forces of Ukraine. According to him, Ukraine cannot yet abandon Soviet equipment, but its use requires proper technical maintenance, modernization, and maintenance in combat-ready condition.

In turn, Viktor outlined effective steps for the preservation and development of the industry: restoration of tax preferences until at least 2035, expansion of state orders, increased funding for research and development, and integration of Ukrainian aircraft manufacturing into European and world programs for the creation of modern aviation equipment.