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At the forum “Dialogue between Civil Society, Business, and Government,” Oleg Snitsar, Director of Government Relations at the IT Ukraine Association, highlighted that Ukrainian IT service exports have continued to decline steadily since 2022. The primary reasons for this downturn include an insufficient number of exempted industry specialists and increased tax pressure on employees.
According to the IT Ukraine Association, the export of IT services in the first half of 2024 decreased by 5% compared to the same period in 2023, amounting to $3.21 billion. In 2023, for the first time in recent years, exports of IT services also declined, with the industry generating $6.7 billion in revenue, down 8.5% from 2022. Such indicators indicate serious challenges for the industry, which faces great pressure from both external and internal sources,
Oleh Snitsar emphasized.
The main issue facing the IT sector is human resources, as increased personal taxes lead to higher labour costs, reducing the competitiveness of Ukrainian companies. Many foreign clients also avoid working with Ukrainian companies due to the risks posed by the war, the mobilization of key specialists and difficulties in retaining staff.
In addition, as of July 2023, only 1.5% of IT professionals had been exempted from military mobilization, creating added pressure on companies losing key personnel. Moreover, rising taxes for residents of Diia City – a unique legal framework for IT companies – threatens their ability to remain competitive in the global market.
In light of this, business representatives are calling for transparent, fair, and stable conditions for industry development.
It’s crucial for the government and businesses to work together to ensure transparent and stable tax policies. This will not only help retain existing companies but also attract new investments,
Oleh Snitsar stressed.
The IT industry remains critically important to Ukraine’s economy, given its potential to create jobs and generate export revenue. Therefore, it’s essential to focus on supporting the talent pool, creating a favourable tax environment and ensuring long-term development to lay a foundation for the country’s economic recovery after the war.
