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Ukraine to introduce import duties on regional aircraft

Ukraine to introduce import duties on regional aircraft

KIEV: Ukraine will impose import duties on regional aircraft in order to protect national planemaker Antonov. The duties will affect operationally leased aircraft with operational empty weight from 10 to 30 tons and maximum capacity from 44 to 110 seats. According to the new law, signed by the president Petro Poroshenko, the limitations are to become effective on January, 1 2018. The government explains this measure will support Ukraine’s Antonov Company that design and produce aircraft of this class: An-140 turboprop and An-148 and An-158 regional jets. The adoption of the new law is expected to help to increase average annual local production by five to eight airframes until 2025.

According to State Aviation Administration of Ukraine, as of January, 9 2017 there are at least 16 foreign-built aircraft operated in the country corresponding to the criteria enumerated in the law. The aircraft in question are five Embraer E190 airframes operated by the country’s largest carrier Ukraine International Airlines as well as eleven Embraer ERJ145s, with four airframes being registered with Dniproavia airline. The new law stipulates other novelties as well that are facilitating the work of Ukraine’s aviation industry. In particular it prolongs the VAT-free import regime of goods used to develop, manufacture and repair aviation products until January 1, 2025. Moreover the list of such goods is expanded.

In addition to that the aviation industry businesses are exempt from corporate income tax until 2025. It is expected that the leftover funds due to this program will be diverted to R&D, creation and modernization of technological infrastructure, production facilities expansion and implementation of new technology. It should be noted that Antonov Company nowadays needs financial support from the government to ramp up aircraft production to the full scale level. In total the company demands more than $700 million. The money is required to substitute Russian components as well. Antonov manufactured no aircraft last year. In 2015 the company built two aircraft – An-148 and An-158. Several uncompleted airframes of these types are standing idle in Antonov workshops now.