The National Association of the Defense Industry of Ukraine (NAUDI) urged deputies not to vote for Defence City (bills to create a special legal regime for gunsmiths) in the second reading, returning them to the relevant committee for further development.
The association sees the problem in the criteria that a defense company must meet to receive benefits. According to NAUDI, they are too strict, which is why many companies cannot claim the relief.
"The proposed mechanism for selecting Defense City residents creates the risk of including only "selected" companies, while many efficient and strategic enterprises that already have the status of defense-critical may remain off the list. This will mean working in worse conditions: without tax incentives, with a higher production load, and without proper protection from the risks of war," the association wrote.
In the current version of the bill, the main criterion for including a company in the Defence City is 75% of the income received from the sale of weapons or related services. NAUDI believes that the benefits should be extended to all enterprises recognized as critically important in the defense industry, and not be tied to percentages.
Recall that Defence City is a future special legal regime for defense companies. After the first reading, the draft laws were criticized by armed associations. They were prepared with changes for the second reading.
Another association, the Ukrainian Council of Gunsmiths, described the new text of the bill as "eliminating most of the risks that were in the previous version" and stated that it "has no critical comments on the concept."
Read more about the discussion around the defense sector reform in the text of Defense: A second wind for gunsmiths or a "club of the chosen ones": How is the largest defense industry reform in recent years being forged?