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Business |
Log export levy reduced by 6%
THE log export tax has been reduced
by 6% from 34.5% to a flat rate of 28.5% of the free on board
(FOB) value under this year’s national budget.
The PNG Forest Authority issued this clarification in response to
numerous queries from logging companies and landowners of forest
resource development projects concerning the new log export
development levy of K8 per cubic metre (K8/m3).
The National Forest Service (NFS) through its managing director
Kanawi Pouri had advised that the restructure and reduction of the
levy had been offset by the introduction of the new log export
development tax.
NFS said the reduction was equivalent to K8/m3, hence the new levy
rate of K8/m3.
With this, the National Government has waived its share of the log
export tax revenue by K8/m3, the proceeds of which would be
redirected to provinces and districts with natural logging
projects.
PNGFA said that over the years, prior to the passage of the
Forestry Act 2006 last November, revenue from the log export went
directly to the National Government with no money being shared
with provinces hosting the resource projects.
The revenue was instead distributed to all provinces.
As a result, the provincial governments and landowners from the
forest logging provinces demanded a fair share of the log export
tax revenue.
In response, the Government, through the Forestry Act 2006,
created the new levy for provinces to access direct funding
through proceeds from the collection of this new levy fund
community-based agriculture and infrastructure development
projects in resource provinces.
NFS further advised that the levy is applicable on the FOB value
of all natural logs exported (excluding plantation logs) from Jan
1, 2007, while the Forest Act 2006 specifies the levy as a customs
duty or as a duty imposed under the Customs Act.
The levy will be used to fund community-based agriculture or
infrastructure development projects in provinces that currently
have natural forest logging operations.
It would not be paid as cash premiums to landowners or landowner
companies, NFS said.
 
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