Bill on abolishing the duties on a number of goods that are imported into Ukraine for the needs of aircraft manufacturers until 2016 was registered in the parliament. The author of the document is the deputy from Party of Regions, head of the board of directors at the largest aircraft engines building company “Motor Sich” Viacheslav Bohuslav.
This document suggests expansion of the list of products covered by the Article No. 2 “On the Development of the Aircraft Industry,” which means that there will be no import duties on these kinds of products. The list of products includes aviation gasoline, jet fuel, sanitary bags, lubricants, and adhesives.
In addition to this, privileged regime will be temporarily applied to solvents and polymers, epoxy resins, plumbing and plastic products, rubber products for aviation, leather, plates and bars of pressed wood and paper, books and brochures, drawings and plans.
In case the document is approved, there will be no fees for importing cotton and nylon fabric, felt, carpeting, lifejackets, iron, steel and rolled steel angles, panels and pipes, springs, staples and nails, constructions made of copper, aluminum, lead and tin, keys and nuts, locks.
The list also includes turbojets, hydraulic pumps, air conditioners and refrigerators, centrifuges, jacks, batteries, and electrical equipment.
The explanatory note states that the project was developed in order to ensure proper system of procurement of goods, work and services for the effective use of accumulated scientific, technical, and industrial potential of the aviation industry and also to create favorable conditions for the effective and profitable operation of domestic enterprises engaged in modernization, manufacture, and repair of aircrafts, helicopters, and engines for them, and for the preservation of product supply to the international markets.
“Ukrainian plants produce details and pass them on to aircraft plant. Every time the price of these details includes 20 percent of VAT. It means that all domestic components in comparison with imported ones are 20 percent more expensive,” said Viacheslav BOHUSLAV to The Day. Besides, details are often made of imported raw materials and when they are brought into country another 20 percent of customs duty is paid on them. Thus, the products of domestic aviation industry are 32 to 40 percent more expensive for the Ukrainian market. When it is imported the producer gets the VAT return but the customs duty is never compensated. That is why Ukrainian products are exported at higher price. If the parliament will support this initiative, Ukrainian manufacturers will have the same rights and will be equally competitive with the similar companies from abroad and the additional sales of domestic aviation industry will provide additional revenues to the state budget of 30 to 35 million US dollars every year, according to Bohuslav’s calculations.
