NATO, G7 reps support Defense City concept

The creation of the Defence City special regime, which involves the creation of a special legal regime to support enterprises of the defense-industrial complex, has been supported by representatives of NATO and G7 partner countries.

According to the press service of the parliamentary committee on finance, tax and customs policy, a meeting was held on July 14 on the Defence City concept, during which the partners discussed the idea with the authors of the package of draft laws on the special regime.

"The partners expressed support for the initiative and measures to ensure the development of the Ukrainian defense industry. The parties to the discussion agreed to consult in the future to ensure the conditions for effective cooperation between the countries' defense enterprises. In particular, the initiators of the project called on the partners to join the discussion of cooperation instruments provided for within the framework of Defence City," the press release says.

According to Danylo Hetmantsev, Chairman of the Finance Committee, the authors of the draft law will continue to improve the mechanisms provided for in Defence City to strengthen the Ukrainian defense industry.

"The package of draft laws on Defence City should provide an impetus for the development of the defense industry. First of all, for the needs of our army. But we understand that the Ukrainian defense industry is capable of producing many times more products than it is now. And these are weapons that have been tested on the battlefield, which gives significant competitive advantages in international markets," the press service quoted Hetmantsev, the head of the Verkhovna Rada Finance Committee, as saying.

He emphasized that the introduction of the special regime will significantly expand the export potential of the Ukrainian defense industry. In the long term, it will ensure Ukraine a place in the TOP-5 world arms exporters.

The package of draft laws provides for a number of benefits for enterprises to ensure the necessary conditions for an increase in the volume of manufactured defense products. In particular, it concerns cooperation between Ukrainian and foreign defense industry companies. The priority is the creation of joint ventures that will provide new jobs in Ukraine and guarantee the production of more weapons for the Ukrainian army. However, proposals for the production of weapons outside Ukraine are also being considered.

As reported by the director of the procurement department of the Ministry of Defense, Hleb Kanevsky, one of the directions of the special regime is also the creation of spare production sites in the territories of the partner countries of the Ramstein platform. It is noted that we are talking about countries that have been providing Ukraine with financial and military assistance since 2022 to organize the rebuff of the enemy and confirm their readiness to invest additional funds in Ukrainian companies that will be located on their territory for the purchase of weapons, ammunition, missiles, etc.

"The first two bills from the Defense City package will be considered by the parliament in the first reading this week. We plan to vote on and sign the entire package of bills by Independence Day," added David Arakhamia, head of the faction of the ruling Servant of the People party.

As reported, on July 11, the Finance Committee recommended as a basis Bills No. 13420 (amendments to the Tax Code) and No. 13421 (amendments to the Customs Code) for the implementation of the Defence City concept. They provide for additional support tools, the introduction and protection of the list of defence industry enterprises (residents of Defence City) from the Ministry of Defence, tax benefits until January 1, 2036. regarding exemption from income tax subject to reinvestment, land and environmental tax, as well as real estate tax, the current tax preferences for defence industry enterprises are preserved - VAT benefits, accelerated depreciation, benefits for relocated enterprises and their employees.