Aviation on the brink: without tax benefits, Ukraine risks losing a strategic industry

Ukraine’s aviation industry is warning that without an extension of the tax benefits that were in place from 2017 to 2024, the country risks losing a strategically important sector.

According to the Aerospace Association, restoring these incentives for 2025–2035 would bring the state budget about 55 billion UAH (≈1.12 billion euros) in tax revenues with a total volume of preferences of 18 billion UAH (≈0.37 billion euros) — that is, more than three hryvnias in taxes for every hryvnia of support and around 37 billion UAH (≈0.76 billion euros) in “net” benefit for the state.

The experience of 2017–2024 already shows that the benefits paid off: companies paid 22.91 billion UAH (≈0.47 billion euros) in other taxes while receiving 9.33 billion UAH (≈0.19 billion euros) in preferences — every 10 UAH (≈0.20 euros) invested generated 25 UAH (≈0.51 euros) for the budget.

War and the cancellation of the benefits have almost paralyzed the industry: under NACE code H52.23, tax payments and social contributions fell from more than 2.2 billion UAH (≈44.9 million euros) in 2020 to 620 million UAH (≈12.7 million euros) in 2024. A sector employing over 50,000 highly qualified specialists is losing talent and investment, which threatens Ukraine’s technological sovereignty and its position in the global market.

Market players stress that extending tax preferences for aviation is not an act of goodwill but an economically sound investment in the country’s post-war recovery and competitiveness.