Benefits that keep the industry afloat: Kharkiv discusses the future of aircraft manufacturing

Ukrainian aircraft manufacturers in Kharkiv urged the authorities to preserve tax benefits and other incentives for the industry, which is of strategic importance in wartime conditions. During a meeting with the head of the VRU financial committee, Danylo Hetmantsev, and the city authorities, they discussed further state support and the preparation of proposals for the Defense City bill, writes UNN.

DetailsAviation today is crucial for Ukraine – both on the battlefield and for restoring industrial potential. We have highly qualified engineers, unique scientific schools, and powerful enterprises with many years of experience. With proper state support, the industry can not only meet defense needs but also strengthen exports, create jobs, and become a driver of technological breakthroughs.

Viktor Popov, Head of the Aerospace Association of Ukraine, emphasized that the aviation and aerospace industries are key to technological development, and in current conditions, it is especially important to preserve benefits that allow for maintaining achievements and moving forward even in difficult times.

Over these 15 years, a number of engines have been created that will be sold for another 50 years and bring benefits not only to employees but also to the state in the form of taxes. The industry has a multiplier effect – one workplace in aircraft construction creates from 9 to 12 workplaces in related industries.

Experts also discussed the fact that without state support, the Ukrainian aviation industry will not be able to compete in the international market and ensure investments in its own development.

There is a situation caused by the needs of the defense sector in the conditions of martial law. We fulfill large orders in cooperation with enterprises for the Armed Forces and other defense structures. Enterprises face constant shelling and have to resume work almost every day. In parallel, the issue of relocation arises. Products for the defense forces need constant modernization, funds are needed for research and development work.

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In general, industry representatives called on the authorities to extend the law that has provided tax benefits for aircraft manufacturing enterprises since 2010. Among the key preferences are exemption from income tax (provided investment in research and development work), VAT and customs duties on equipment imports, as well as benefits for international cooperation and defense production. According to participants, these conditions allowed for the creation of competitive products, preservation of jobs and export potential even during the war.

In response, Kharkiv Mayor Ihor Terekhov emphasized that the aviation industry is of strategic importance to the city. According to him, the first aircraft was produced in Kharkiv, more than ten aviation and space enterprises operate here, and the local aviation industry is one of the largest taxpayers in the region.

In turn, the head of the financial committee, Danylo Hetmantsev, proposed that aircraft manufacturing enterprises carefully study the new Defense City bill and submit their proposals for amendments that would take into account the specifics of the aviation sector.

Long-term state orders are the most powerful stimulus for industrial development. Today, we registered the Defense City bill. All enterprises included in this system fall under a special regime, which includes VAT benefits for components, income tax, environmental requirements, and other preferences to strengthen export potential.

As a result, the parties agreed that industry representatives would prepare and submit their proposals for the Defense City bill within a week. The first reading of the document is scheduled for July 17, and the second for the end of August 2025.

RecallEarlier, UNN reported that Ukraine’s aviation industry is threatened by a systemic crisis amid the full-scale war. Due to equipment dilapidation, loss of tax benefits, and difficulties in importing spare parts from abroad, one of the main challenges has been the need for import substitution of Soviet components. Experts emphasized that without state support, production modernization, and the establishment of legally transparent procedures, the industry will not be able to ensure either combat readiness or strategic stability in the long term. In particular, the commander of the Army Aviation of the Armed Forces of Ukraine, Pavlo Bardakov, stated that a significant part of Ukraine’s aircraft fleet is still based on Soviet equipment, for which spare parts are no longer produced, which threatens the execution of combat missions, including medical evacuation and frontline support.