Ban on log export ill-advised: Official

THE Government’s 2024 money plan to decrease the log export tax by 20 per cent in a bid to stimulate and attract investment into downstream processing and its policy to ban round log export, commencing 2025, will make multitudes of forest communities and families suffer and return to isolation, the Forest Industry Association (FIA) has announced.
FIA President Kanawi Pouru said the plans were misconceived and ill-advised and will cost the country much in hardships for rural communities whose livelihoods depended solely on forest harvesting operations.
Further, the policy would create job losses, costs hundreds of millions in foregone forex, more tax revenue losses and it would not support a viable forestry downstream processing industry, he said.
Pouru said in a statement yesterday that while the industry welcomed the tax reduction, it remained “sceptical of the Government’s intentions to deliver its transitioning policy towards downstream processing”.
“Twelve months ago, the 20 per cent tax was imposed to raise and take K30 million of customary forest owners (without prior consultation) to deposit it into a climate change global fund,” Pouru said.
“During that 12 months, 27 log export sites suspended production, more than 5,000 jobs were lost, and more than US$80 million (about K298 million) was lost in forex. And 12 months later, it’s done a ‘u-turn’ by removing the tax under the smokescreen of going into downstream processing.
“Perhaps it may be worth considering as the starting point for the governments downstream processing reforms to assist existing wood processing fixtures. There are 11 medium-large scale sawmills, four plywood mills and four engineered wood product manufacturers that could immediately be appraised and assisted subject to viability.”
The industry had attempted, Pouru claimed, since the prime minister’s first announcement of the policy at the 2019 National Forestry Summit, to engage with government officials in the last three-to-four years, to discuss and develop a transformation and transitional plan for phasing out round log exports and phasing in downstream processing.