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Crimea to be special economic zone with tax breaks

Published time: March 31, 2014 09:53
Edited time: April 01, 2014 10:21
Russia's Prime Minister Dmitry Medvedev (2nd R), Deputy Prime Minister Dmitry Rogozin (R) and Sevastopol Mayor Alexei Chaliy (C) visit the 13th Ship-Repairing Yard of the Black Sea Fleet of the Russian Defense Ministry in Sevastopol, March 31, 2014.(Reuters / Alexander Astafyev)

Russia's Prime Minister Dmitry Medvedev (2nd R), Deputy Prime Minister Dmitry Rogozin (R) and Sevastopol Mayor Alexei Chaliy (C) visit the 13th Ship-Repairing Yard of the Black Sea Fleet of the Russian Defense Ministry in Sevastopol, March 31, 2014.(Reuters / Alexander Astafyev)

Moscow will make Crimea a special economic zone with tax breaks to attract investors, Russian Prime Minister has announced at a government session in Crimea’s capital Simferopol.

“We made a decision to make Crimea a special economic zone,” Medvedev said. “Today the state duma began reviewing this legislation.”

Companies that make investments with the authorities of Crimea and Sevastopol could be given tax breaks, Prime Minister said

“We have to ensure swindlers don’t take advantage of this state in transition,” Medvedev said. “It is our purpose to make the peninsula as attractive as possible for investment.”

The Prime Minister described the development of Crimea as a national priority and compared the importance of the region to that of the Far East.

Earlier, Medvedev drew parallels between Crimea and another Russian region that’s geographically separated from Russia. He said Crimea could acquire the status of a special economic zone similar to the one enjoyed by Russia's western Kaliningrad region.

"As well as in the case of Kaliningrad, a specific law is required which allows tax privileges to all large investors, ready to put money into the region," Medvedev said last week.

Speaking in Simferopol on Monday, the Prime Minister said Crimea was ready to be integrated into the Russian monetary system.

Russia's Prime Minister Dmitry Medvedev (back C) watches Russian troops parading as he takes part in a wreath laying ceremony at a Memorial the 1941-1942 Heroic Defence of Sevastopol during the World War II in Sevastopol, March 31, 2014. (AFP Photo / Alexander Astafyev)

“For fully fledged integration of Crimea into the ruble zone, Russian currency has been delivered in sufficient volumes to the peninsular,” he announced.

Medvedev said the ruble has already started circulating in the region.

“Now, our main task is to expand the Russian banking network to Crimea,” he added.

The Crimean parliament approved switching to the Russian currency earlier in March. The MPs decided to also keep the Ukrainian hryvnia as a second official currency until 2016, to make the transition to the ruble less painful.

Medvedev earlier this month ordered the cabinet to have a comprehensive program on the development of Crimea and Sevastopol ready by July.

Vice-premier Dmitry Kozak, who supervises the peninsular, said the plan could be ready as early as April 15. Before being entrusted with overseeing Crimea, Kozak was in charge of preparations for the Sochi 2014 Olympic and Paralympic Winter Games.

Russia's Prime Minister Dmitry Medvedev (2nd R) visits the 13th Ship-Repairing Yard of Russian Black Sea Fleet in Sevastopol, on March 31, 2014, with Russian deputy prime minister Dmitry Rogozin (R), who oversees the defence sector, accompanying Medvedev. (AFP Photo / Alexander Astafyev)

‘Everything will be fine now’: PM promises ferry, bridge, better salaries

The Russian prime minister has also met with the residents of Sevastopol answering their questions concerning issues of the regions development.

"I brought here the whole Russian government to see how to develop Crimea and Sevastopol," said Medvedev. "I congratulate you on [entering] a new stage. We will work, we will develop our homeland, well done. Everything will be fine now."

Russia's Prime Minister Dmitry Medvedev (C) visits the 13th Ship-Repairing Yard of Russian Black Sea Fleet in Sevastopol, on March 31, 2014.(AFP Photo / Alexander Astafyev)

Among the first questions asked was the issue of low salaries.

"If you mean salaries and pensions, we will do everything, all the documents have been signed," said the prime minister.
One of the pressing issues is transport links with Russia. Medvedev answered: "First, we’ll try to make cheaper airline tickets, when it comes to Moscow and other big cities."

Medvedev elaborated that Russia will develop a ferry service to Crimea, also speaking about plans to build a bridge across the Kerch Strait. "But we will also build a bridge. Even, maybe two - one for trains, the second for cars."

Before his speech in Sevastopol, Medvedev laid flowers at the Eternal Flame on the Alley of Heroes, commemorating those who died during the defense of the city during World War II.

Russia's Prime Minister Dmitry Medvedev takes part in a wreath laying ceremony at a Memorial the 1941-1942 Heroic Defence of Sevastopol durng the World War II in Sevastopol, March 31, 2014.(AFP Photo / Alexander Astafyev)

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