Special regime for exporters: Ukraine is preparing to allow arms exports
12 May 2025 15:42
The Cabinet of Ministers needs to make a well-grounded and correct decision on authorizing the export of Ukrainian military products. This opinion was expressed by the Chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy Danylo Hetmantsev, reports
In his opinion, to support the locomotive of the Ukrainian economy, which is the defense industry, it is necessary to create a special legal and tax regime that could be used by Ukrainian defense companies.
Danylo Hetmantsev said that he and his team are currently preparing a number of legal acts that would properly regulate such a regime.
What is the importance of an arms export permit?
Ukraine’s own production of military goods has increased from $1 billion in 2022 to more than $9 billion in 2024 over the three years of war.
Undoubtedly, there has been an increase in state orders, which has helped to renew and restart those industries that were underutilized, as well as launch new industries, such as drones or robotics. But the potential of the defense industry is still not fully utilized.
According to a survey conducted by the Technological Forces of Ukraine with representatives of 34 private sector defense companies, as of February 2025, only 15% of the surveyed manufacturers had fully utilized production capacities. Another 60% were half-utilized. The remaining manufacturers’ production capacities are less than 30% utilized or completely idle.
Allowing arms exports could support domestic producers and allow them to operate at full capacity.
What are the options for arms exports?
Back in October last year, the President of Ukraine instructed the relevant ministries to develop proposals for the export of weapons, including Ukrainian drones. He spoke about this in an interview with Ukrainian journalists and
Volodymyr Zelenskyy explained that he had asked the Minister of Defense to think about possible export models, while providing for certain restrictions and safeguards.
“I rule out exporting […] to someone, and then it goes to Russia. That’s one story. The second story is that it should be only among the Ramstein circle. With all due respect to the Middle Eastern countries and others, I do not believe that we have the right to export to those who did not help us,” the head of state emphasized.
According to information published in the Ukrainian media, three possible export scenarios are being considered:
– point approval (individual consideration of each contract);
– export of half of the volume of Ukrainian orders, provided that part of the proceeds is used to purchase weapons for the Armed Forces;
– creation of a separate fund to receive an additional 20% export duty.
It is known that Ukrainian arms manufacturers are positive about the permission to export arms and cite this as one of the factors that will contribute to the development of production in Ukraine. According to the aforementioned survey conducted by the Technological Forces of Ukraine, it is the predictability of government orders for several years, as well as the opening of arms and military equipment exports for more than 70% of the surveyed companies, that would motivate manufacturers to stay in Ukraine.
