The Infrastructure Ministry of Ukraine has proposed to step up bilateral talks with the European Union (EU) states on the full liberalization of flights, irrespective of the status of the European Common Aviation Area (ECAA) agreements.
The proposal is outlined in the draft order of the Cabinet of Ministers of Ukraine on the approval of the aviation transport strategy until 2030, the text of which was made public on the website of the Infrastructure Ministry.
In the text of the document its authors, first of all, pointed out the incompleteness of the process of signing the ECAA Agreement; non-systemic incorporation of EU legal acts into the legislation of Ukraine; an imperfect system of public regulation (in particular currency regulation), as well as a tax policy in the sphere of providing transport services; insufficient level of competition in the market of air transport services.
Among other problems, the application of VAT to imports of vehicles and their aggregates or spare parts is also indicated, while rivals from Europe and other countries gain a competitive advantage – exemption from these taxes if they are mainly involved in a foreign economic activity (more than 50 percent).
As a possible solution to these problems, the Infrastructure Ministry proposes that the regulatory and legal acts in the field of air transport are brought in line with the requirements of the EU aviation legislation, air carriers, handling companies, suppliers and refueling operators are provided with equal, open and transparent access to the market of air services and transport infrastructure.
Deregulation of regional airports will also contribute to solving these problems; as well as thhe application of a favorable tax policy in relation to the aviation industry; application of a zero VAT rate for domestic air transport; implementation of the motivation program for fleet renewal; ensuring the development of domestic business aviation by simplifying the conditions for the customs clearance of aircraft; introduction of a preferential system of land taxation for aviation infrastructure; a reduction in the payment of dividends or a portion of net profit to the budget and the mandatory use of these payments by airport owners/operators solely for the development of airport infrastructure.
