Regardless of closed skies and battle, Ukrainian plane manufacturing stays one of many largest donors to the state funds: each hryvnia of tax advantages returns to the state in 2.5–3 instances the quantity. The business not solely generates billions in income but in addition maintains tens of 1000’s of jobs and important protection applied sciences, which is why the state wants to revive tax preferences for the business.
Ukrainian aviation has been dwelling within the actuality of a "closed" sky for the fourth 12 months. The brand new actuality, which started on February 24, 2022, reset the enterprise fashions of aviation enterprises in sooner or later. Given the scenario, it’s simple to attract an emotional conclusion that the aviation business in Ukraine has briefly stopped working, and due to this fact paying taxes. Nevertheless, aviation continues to fill the funds and "take the hit" regardless of the shortage of state help. What must be carried out to stimulate the expansion of the business, learn within the materials of UNN.
Tax revenues from the aviation business
The aviation business of Ukraine is a major taxpayer to the state funds. In response to the Aerospace Affiliation of Ukraine, solely 4 main plane manufacturing enterprises (JSC "Motor Sich", "Antonov", "Ivchenko-Progress", "FED") transferred 22.91 billion UAH in taxes to the funds in 2017-2023. The lion's share of this quantity was shaped exactly within the pre-war years, when manufacturing labored with out missile strikes, relocations, and compelled shutdowns.
Already in 2017, the business supplied 1.63 billion UAH in tax revenues, and by 2020, the quantity of paid taxes elevated to three.16 billion UAH, nearly doubling.
– famous within the Aerospace Affiliation of Ukraine.
They usually emphasize that 2021 was the height 12 months for manufacturing dynamics earlier than the sky closed: plane manufacturing enterprises elevated manufacturing volumes by 30% in comparison with the earlier 12 months. And the typical wage at these enterprises elevated by a median of 28%.
The Affiliation itself concludes that earlier than February 24, 2022, the aviation business was already among the many "giant taxpayers" – those that present the funds not with a whole lot of hundreds of thousands, however with billions of hryvnias yearly, and achieve this systematically, not as soon as.
Tax advantages and the effectiveness of state help for plane manufacturing
The tax stability of the business was ensured not a lot by air transportation as by plane manufacturing itself. This phase had a excessive stage of improvement, and accordingly, monetary returns, because of the so-called "fora" from the state.
In spite of everything, till December 2024, the aviation business had tax preferences from the state, which stimulated its improvement. In 2017-2023, the full quantity of tax preferences for 4 key enterprises amounted to 9.33 billion UAH. Particularly, this contains exemption from revenue tax on plane manufacturing, VAT at a zero price on product gross sales, exemption from VAT on the import of kit and elements, exemption from import duties, and exemption from land tax.
Due to this, the "Motor Sich" enterprise acquired tax advantages from the state amounting to 4.38 billion UAH in 2017-2023, and paid 10.24 billion UAH in taxes to the funds throughout these years. That’s, each hryvnia of advantages returned to the state in additional than double the quantity.
The identical is demonstrated by "Antonov". Throughout the identical interval, the enterprise used tax advantages amounting to three.47 billion UAH, whereas transferring 9.30 billion UAH in taxes. That is nearly 2.7 UAH in tax revenues for each hryvnia of state help.
On the identical time, the Aerospace Affiliation of Ukraine explains that the funds that enterprises may accumulate because of tax preferences weren’t "eaten up", however have been directed to improvement. As much as 60% of the assets free of taxation have been invested by enterprises in manufacturing modernization, as much as 20% – in analysis and improvement work, 10% – in coaching {and professional} improvement of workers. In financial phrases, for instance, "Motor Sich" reinvested greater than 8 billion UAH within the improvement of the enterprise over 7 years of tax advantages, and "Antonov" over the identical interval 3.76 billion UAH. That’s the reason the price of aviation merchandise was diminished by 15-20%, and the power depth of manufacturing by 25-30%.
The event of the aviation business additionally impacts associated areas. Each greenback invested within the business creates as much as 4 {dollars} of impact in associated sectors – from metallurgy and electronics to the chemical business. One job within the aviation business gives as much as ten jobs in associated industries. This explains why, even in disaster situations, enterprises have retained about 40,000 extremely certified workers, and from 2017 to 2023, created greater than 3,000 new jobs.
Plane manufacturing as a part of protection potential
Plane manufacturing enterprises are crucial to nationwide safety. They develop unmanned aerial automobiles and supply technical upkeep of aviation tools for the Armed Forces.
2020 turned a landmark 12 months for your complete Ukrainian plane manufacturing business: on the direct initiative and help of President Volodymyr Zelenskyy, the state for the primary time positioned an order for 3 An-178 army transport plane for the Armed Forces of Ukraine. This was not only a contract for the Antonov enterprise, however a sign that the state was betting on the revival of its personal plane manufacturing. By guaranteeing the loading of manufacturing capacities, stimulating funding in modernization and enlargement of manufacturing, and rising the curiosity of international companions in Ukrainian aviation tools.
Plane manufacturing is likely one of the few industries in Ukraine the place a full cycle of improvement and manufacturing of complicated tools has been preserved. This isn’t solely an financial asset, but in addition a matter of technological and protection sovereignty of the state.
– emphasize within the Affiliation.
Is business improvement doable with out tax preferences?
The state's refusal to help the aviation business within the type of tax advantages has dealt a significant blow to all achievements and beneficial properties. The Aerospace Affiliation warns that with out a preferential regime, funding packages shall be diminished by 40-60%, the price of aviation merchandise will improve by at the very least 15-20%, and manufacturing volumes will fall by a 3rd. Nevertheless, if help is restored, over the subsequent 10 years it will possibly result in 55 billion UAH in tax revenues, with preferences amounting to 18 billion UAH.
Solely in 2025-2035, the business is able to offering the state with over 55 billion UAH in tax revenues with an anticipated quantity of advantages of about 18 billion UAH. That’s, each hryvnia of preferential help can carry over three hryvnias in taxes – considerably greater than in pre-COVID years.
– famous within the Aerospace Affiliation of Ukraine.
Ukrainian plane manufacturing isn’t a "funds expense", however a strategic funding that pays off threefold, ensures the state's protection functionality, and preserves technological sovereignty. Refusal to help this business will imply not solely the lack of 55 billion UAH in potential tax revenues by 2035, but in addition the lack of Ukraine's standing as one of many few international locations on this planet with a full cycle of plane improvement and manufacturing. Within the post-war interval, these applied sciences and competencies can turn out to be one of many locomotives of financial restoration.