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Almost 10% of Ukraine’s farm land is farmed off the books, costing the state as much as $1bn in lost taxes annually, reports the Association of Agrarians of Ukraine. Lease payments on these tax-dodging schemes total as much as $2.5bn, the group’s chairman, Alexander Vasilivsky, complained to Roman Leschchenko, the new Agriculture Minister.
Through 2025, the price of farm land should double, thanks to the new land market that starts July 1, Prime Minister Shmygal, told the Ukraine 30 land forum yesterday. In addition, local governments should see rents more than double on their farm land, from 7% of estimated value to 18%, he predicted. A pilot project to lease state-owned farm land through electronic auctions is resulting in higher rents, he said.
German Chancellor Angela Merkel stated on May 20 that she would be meeting with US President Joe Biden to discuss foreign issues, including Ukraine. German media dw.com reports that the conversation will focus on a common position regarding Ukraine, Russia, and China. In a press conference held on the sideline of WDR Europaforum, Merkel stated that the meeting was a result of the US “coming a little closer” to the German position on the Nord Stream pipeline, even though there were obvious differences of opinion. Merkel and Biden are already scheduled to meet twice in June. First, they will meet at the G7 meeting in the United Kingdom on June 11-13, and then again at the NATO summit in Brussels.
On July 1, a limited farm land market is to open. Sales only are allowed among Ukrainians and the limit is 100 hectares. In advance of this modest opening, farm land rents increased 6.5% y/y in 2020 to an average of 3,380 hryvnia/hectare, Ellina Yurchenko, a farmland expert for the Ukrainian Agrarian Business Club said in a press release Friday. At the Forum, Timofei Milovanov, president of the Kyiv School of Economics, said that by allowing farmers to borrow against their land, the market will result in higher yields, greater productivity and an extra $2bn in tax revenues.
The Cabinet of Ministers of Ukraine passed a resolution on May 12 founding the Bureau of Economic Security. The bureau will focus on economic crimes, epravda.com.ua reported on the same day. The bureau will take on responsibilities currently under the purview of the Security Service of Ukraine, State Fiscal Service and State Bureau of Investigation. This includes the work of the Tax Police. The bureau will report to the Cabinet of Ministers. The creation of the bureau follows from the Jan. 28 passage by the Verkhovna Rada of the law enabling its creation. The bureau is supposed to increase the professional level of and centralize the government’s efforts to properly execute economic law. It is possible that the consolidation will foster such changes. However, Ukraine is noted for having good laws that are not well applied. Only time will tell if the bureau will be both effective and an effective change.
Viktor Medvedchuk, the Ukrainian opposition leader who is a close friend of Vladimir Putin, is to spend two months under house arrest while awaiting trial for high treason. A Kyiv judge rejected yesterday a prosecutor’s request for jail in lieu of bail of nearly $11mn. The Russian president is the godfather of Medvedchuk’s daughter. In the 424-member Rada, Medvedchuk leads the largest opposition group, the 44-member Opposition Platform – For Life.
19 UKRAINE Country Report XXXX 2018 www.intellinews.com