Mirisim: Increase to be reviewed

A TAX of 59 per cent introduced by the Government on export of round logs will be reviewed after six months, Forest Minister Solan Mirisim says.
Mirisim stressed that the 24 per cent increase in the export tax this month from a previous 35 per cent was aimed at promoting downstream processing.
Mirisim was speaking at a media conference yesterday following concerns raised by the industry regarding the Government’s decision to increase the export tax to 59 per cent.
The PNG Forest Industries Association in a recent paid advertisement said with the imposition of the new tax regime, an increase in rural unemployment was likely to happen.
The association said the Government would miss out on substantial revenue and infrastructure development where it was needed especially in rural areas.
The association also urged the Government to review, revoke and delay the imposition of the new tax rates to avoid a looming industry shut down.
Mirisim and PNG Forest Authority managing director Tunou Sabuin were adamant in implementing the new tax regime saying only the “genuine companies” would remain despite the policy.
“It is a Government decision and I, as the Forest Minister, is in support of it, however, since the decision, through the 2020 Appropriation Bill, the industry has come out strongly against it,” he said.
“As the minister responsible for this sustainable industry, it is my intention to take up the matter with my relevant colleague ministers.
This includes the Ministry of Treasury, Ministry of National Planning and Monitoring and Ministry of Finance to seek a review of the Government’s approved policy and consultation with all stakeholders within a time frame not more than six months.
“It is not the intention of the Government to minimise any form of benefit to all the stakeholders within the country including all statutory payments (inclusive of the log export tax, and other negotiated payments to the stakeholders, particularly the landowners).
“I hope that the industry would be giving a respite to allow continued log export given the current downturn in the log export market particularly the Chinese market where over 90 per cent of the log export is destined because of the trade war with the US.
“My advice is that the log export will definitely increase more than 50 per cent of the FOB (free on board) in value from the current 32.5 per cent.
“This is expected to be implemented after the circulation of the notice by Customs PNG this month.
“It is also my intention to increase downstream processing for a projected 50 per cent of the total wood production per annum by 2025.”
Mirisim said the Forest Ministry through the PNG Forest Authority would continue with the periodic review of forestry projects to promote:

• Increase in downstream processing;
• Reduced round log export by 50 per cent in 2025;
• Increase reforestation and afforestation to reach planting target of 800,000 hectares by 2050;
• Increase landowner participation by promoting and supporting SMEs in the forestry sector;
• Increase Government support to assist the genuine timber industry partners to develop timber industrial parks in the country; and,
• The design and development of a new forest revenue system to capture equity-based benefit system for forestry.