A call for down streaming of timber follows a Papua New Guinea Government tax rise on log exports
When meeting with the new US Ambassador, H.E.Erin McKee this week, the Prime Minister, the Hon. Manasseh Sogavare, told the Ambassador the Solomon Islands government is committed to decentralising developments to the provinces.
The Solomon Islands government is also keen to ensure down streaming of timber to facilitate work and business enterprises, according to earlier reports.
I was struck by a call in Papua New Guinea also this week when down streaming initiatives were called for following a move by the Papua New Guinea government to approve a tax rise on log exports levy from 35 to 59 percent.
The news of the tax rise was carried in a broadcast on NBC News PNG and seemingly caused a stir by the local PNG Forest Industry Association when a spokesperson for the Association claimed PNG would lose over a billion Kina if the forest industry shuts down.
Quoting the full text of the NBC news it read:
“The Forest Industry Association said PNG expects to lose over a Billion Kina if the industry shuts operation.
“Four companies have already ceased operations.
“The industry had threatened to close this month after the government approved a tax rise on log exports levy from 35 to 59 percent.
“In an exclusive interview with NBC News, the Association’s executive officer, Bob Tate warned of massive job losses especially in rural PNG, termination of forest investments and spin-off benefits.
“Forest Minister, Solan Mirism said a review will be conducted after six months to see whether the tax is affecting the industry.
“If there is no industry then there is nothing to tax but we would expect the government revenues on exports to fall anyway, given markets trend currently.
“In addition to the four companies that have already closed, there might be none left in 6-months time.
“So we will keep advocating for the deferment of the tax increase and a broad base stakeholder consultation on the future of foresty in PNG, said Tate.
“The Association expects to hold talks with the government to review and revoke the imposition of the new tax rates.
“Mr. Tate said this is the second time the government has breached the agreement with the industry to limit export taxes to 28-point-5 percent of the sales value.
“Meantime, Mr. Tate said, the inevitable consequence of an unsustainable tax rate may see industries close or go bankrupt.
“He said these following reactions from the Forest Minister Solan Mirism and Forestry Managing Director Tunou Sabuin to the threat issued by the Industry to shut down this month.
The Association intends to hold a round table discussion with the government to immediately review and revoke the imposition of the new tax rates.
“We are now aware of four companies that have ceased operations, said Mr. Tate.
“Mr. Tate said the association will continue to advocate on the issue adding that the implementation of the new Tax Regime has been delayed following discussions with the Prime Minister.”
Yours sincerely
Frank Short
