The Public Unions "Ukrainian Agri Council" and the Ukrainian Congress of Farmers call to stop manipulations that are spreading about making all sectors of agriculture sphere legal. In addition, ask the Verkhovna Rada of Ukraine immediately to consider the bill №133131 (recommended by the Agrarian Committee), which equalizes the tax burden of legal agricultural producers and illegal ones.

"Despite of the fact that the bill is one of the most anticipated among the agrarian community, the media published articles by some experts who say that forcing farmers who till soil illegally to pay taxes at the same level with all other citizens of Ukraine is unfair. Allegedly, the tax burden of 1,400 UAH per hectare will lead to the bankruptcy of such farms." – is mentioned in the statement.

The associations emphasize that making the following statements, the "experts" conceal a number of other factors that indicate the negative consequences of the existence of illegal tillage and sales of agricultural products:

"It is not mentioned, that small farmers who work legally already pay more - from 2,000 UAH per hectare every year. That Ukrainians, who receive the minimum salary for their hard work, pay personal income tax and military dues, and shadow farmers (many of whom are millionaires) do not. That the average income from the cultivation of one hectare of agricultural land is from 6000 to 9000 UAH per year. That tax evasion from agricultural cultivation deprives local communities of the opportunity to finance education, health care and social protection for those who really need help and support, and this leads to the destruction of the village” - the statement notified.

The associations emphasize that the refusal to all sectors of agriculture sphere legal or the delay of its adoption will show farmers that they made a mistake to work legally. Therefore, they call on the parliament to consider and adopt in the first reading the bill №3131 as a basic one.

The full text of the statement:

UAC and the Ukrainian Congress of Farmers, on behalf of their members, call to stop the manipulations that are spread in experts’ environ about inexpediency legalization of all sectors of agriculture sphere and equalization of the tax burden for all categories of all sectors of agriculture sphere agricultural land users.

At present, the problem of illegal rent of agricultural land and the illegal market of agricultural products has become acute in Ukraine. Land plots are leased for cash, while lease agreements are not signed, and the relevant income of landowners is not taken into account anywhere. The cultivation of land and the remuneration of employees are also carried out for cash without paying personal income tax (PIT), the single social contribution (SSC), the single tax of the fourth group of the simplified taxation system or corporate income tax. Budget losses at all levels from illegal cultivation of lands are estimated from 60 to 90 UAH billion annually.

The bills №3131, №3131-1 and №3131-2 were registered in the Verkhovna Rada in order to make legal work at all parts of the agricultural sector and to fight against income tax evasion from the use of marketable agricultural land (rent or income from the sale of crops). Each of them aims to ensure the payment of all the minimum amount of taxes already paid by conscientious taxpayers per 1 hectare of agricultural land. According to the data of the State Tax Service of Ukraine and the calculations of agrarian associations, it is impossible to conduct agricultural production legally and pay a smaller amount of taxes per hectare.

The Verkhovna Rada Committee on Agrarian and Land Policy supported the draft of the law №3131.

Despite of the fact that the bill is one of the most anticipated among the agrarian community, the media began publishing some experts who say that forcing shadow farmers to pay taxes on an equal footing with all other citizens of Ukraine is unfair. Allegedly, the tax burden of UAH 1,400 per hectare will lead to the bankruptcy of farms.

Despite of the fact that the bill is one of the most anticipated among the agrarian community, the media published articles by some experts who say that forcing farmers who till soil illegally to pay taxes at the same level with all other citizens of Ukraine is unfair. Allegedly, the tax burden of 1,400 UAH per hectare will lead to the bankruptcy of such farms.

It is not mentioned, that small farmers who work legally already pay more - from 2,000 UAH per hectare every year. That Ukrainians, who receive the minimum salary for their hard work, pay personal income tax and military dues, and shadow farmers (many of whom are millionaires) do not. That the average income from the cultivation of one hectare of agricultural land is from 6000 to 9000 UAH per year. That tax evasion from agricultural cultivation deprives local communities of the opportunity to finance education, health care and social protection for those who really need help and support, and this leads to the destruction of the village

It is important to mention that making legal all parts of the agricultural sector, which is offered by the laws, can only partially equalize legal farmers’ situation, who pay all taxes in comparison with farmers who work illegal and don’t pay ones.

Refusal to reform the agricultural sector clear, or the delay of its adoption will show farmers that they made a mistake to work legally, because the state will support and protect not them but those who work illegaly, pays bribes and support populist politicians and the media who manipulates public opinion and cover up their crimes.

Given the above, we call on the Verkhovna Rada of Ukraine immediately to consider the draft laws №3131, which equalizes the tax burden on legal agricultural producers and illegal ones and leads to the loss of advantage due to non-payment of taxes for the farmers who work illegal.

With this appeal, we support making the agricultural land cultivation and agricultural production legal. That is why it is so important to consider and adopt in the first reading this bill as a basic one. At the same time, we emphasize that during the preparation of the bill for the second reading we will insist on making significant changes, first of all to reduce the rate of tax liability to 4% of normative monetary value and to correct a number of other technical inaccuracies in the bill.

The Chairman

of the PU “Ukrainian Agri Council”                                                                             Andrii Dykun

The Chairman

of the Ukrainian Congress of Farmers                                                                Ivan Slobodyanyk