Ukraine must take advantage of the increasing global demand for modern weaponry, which could become an opportunity for the development of the domestic defense-industrial complex and the growth of its own exports. The Defence City tax and customs regime can assist manufacturers in this regard. This opinion was expressed by the Chairman of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy, Danylo Hetmantsev, according to UNN.
As we can see, total militarization has been observed in the world for several years. Under these conditions, Ukraine must take advantage of the increase in global demand for modern weapons. This is a chance for the Ukrainian defense industry to continue increasing production and actively prepare products for export, after prioritizing the needs of our defenders. The state is interested in this, and the Defence City special regime was conceived, among other things, so that the defense industry could become a driver of our economy,
He added that according to the Stockholm International Peace Research Institute (SIPRI), in 2025, Ukraine's military spending increased by 20% and reached $84.1 billion, which accounts for 40% of GDP. As a result, our country entered the top 7 leading countries in terms of military spending. In 2024, Ukraine ranked 8th.
The world's largest military expenditures are directed by the USA – $954 billion (3.1% of GDP), China – $336 billion (1.7%), Russia – $190 billion (7.5%), Germany – $114 billion (2.3%), India – $92.1 billion (2.3%), the United Kingdom – $89 billion (2.4%), Ukraine – $84.1 billion (40%), Saudi Arabia – $83.2 billion (6.5%), France – $68 billion (2%), and Japan – $62.2 billion (1.4%).
Overall, in 2025, global military spending amounted to $2.887 trillion, which is 2.9% more than in 2024. As a result, the global military burden on GDP reached 2.5% – the highest figure since 2009. It is worth noting that spending on the army and defense worldwide has been growing for 11 consecutive years,
According to him, in 2025, the growth of global military spending reached the 2.9% mark. This is significantly lower than the 2024 rate (9.7%). This slowdown is linked to a 7.5% drop in US military spending in 2025.
According to SIPRI analysts, the negative dynamics are due to the fact that in 2025, the US did not approve new military aid programs for Ukraine. Previously – over the course of 3 years – the Americans approved about $127 billion for our country. Meanwhile, analysts believe that the US will continue to increase overall military spending in the future, given general global trends toward increasing investment in security and defense issues,
SIPRI also does not rule out that Ukraine and Russia will continue to increase spending on the war, which is already reaching the highest levels in the entire history of observation. In particular, last year the aggressor country increased its defense budget by 5.9% to $190 billion (7.5% of GDP).
Ukraine has every chance to become a global leader in the export of military technologies and weapons – this is our strategic goal,
As a reminder
Earlier, Danylo Hetmantsev stated that despite the launch of the Defence City special regime, which was intended to be one of the key tools for the development of the defense-industrial complex, current legislation requires significant revision to achieve a real effect.
Last year we launched the Defence City special regime. For it to start producing the expected results, it is necessary to lower the "entry threshold" to Defence City, increase the circle of its participants, and expand incentives, which businesses are rightly pointing out,
In addition, UNN previously wrote that the Aerospace Association of Ukraine is collecting proposals from companies operating in the defense sector and aircraft manufacturing enterprises regarding changes to the legislation governing the functioning of the Defence City tax and customs special regime. Based on the results of this work, the association plans to submit the developed proposals to representatives of the Verkhovna Rada Committee on National Security, Defense, and Intelligence and join the further refinement of the Defence City regulatory framework in dialogue with the government and parliament.
We should add
As of today, it is becoming clear that the Defence City special regime, which provides customs and tax preferences for enterprises in the defense sector and related industries, is not very popular with businesses. Market representatives, in comments to UNN, explain that this is due to certain legislative gaps that create barriers for potential residents of the special regime.
Among the main deterrents are unclear turnover requirements, which effectively limit access for small and medium-sized businesses to Defence City, as well as unclear audit requirements for companies applying to join the special regime. Furthermore, experts point to the lack of symmetrical tax conditions. This refers to the fact that companies are forced to pay VAT on Ukrainian-made parts, while this tax has been abolished for imported components. The Verkhovna Rada Committee on National Security, Defense, and Intelligence also already understands the need to refine the relevant legislation and is waiting for market proposals.
Experts consider another barrier to be the overly strict provision regarding criminal proceedings. A potential Defence City resident must not be involved in criminal cases in any way. This rule applies even to fact-based cases without suspicions, indictments, or verdicts. Lawyers interviewed by UNN point to a violation of the presumption of innocence.